Congress targets Piyush Goyal for his suggestion that RBI should not look at food inflation while deciding rate cut

A file phot of Union Minister Piyush Goyal.
| Photo Credit: SHIV KUMAR PUSHPAKAR

Taking a dig at Union Commerce Minister Piyush Goyal’s suggestion that the Reserve Bank of India (RBI) need not go by food inflation data to decide on interest rate cuts, the Congress on Thursday (November 14, 2024) claimed that the statement displayed “extreme insensitivity”.

The Opposition party’s attack came after Mr. Goyal, while addressing a global leadership summit of privately-owned TV channel, had asserted that RBI should go for rate cuts. “RBI must cut interest rates. It’s a flawed theory to consider food inflation for making a choice on cutting rates. This is my personal view and not that of the government,” Mr. Goyal had said.

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“Inflation under the Modi government has been lowest since India’s Independence,” the Minister added.

When RBI Governor Shaktikanta Das asked about the Minister’s comment at the same event, he declined to give a reply, saying that the central bank’s monetary policy committee will take an appropriate call at its meeting next month.

Responding to Mr. Goyal’s comments, Congress general secretary (communications) Jairam Ramesh, in an X post, said: “A senior and influential minister is publicly saying that the RBI should NOT consider food inflation while determining interest rates. Aside from raising concerns about the RBI’s independence, this statement also shows extreme insensitivity.”

On Tuesday, retail inflation data had shown a 10.9% increase in food prices pushing retail inflation to its 14-month high at 6.2%. Mr Ramesh argued that food inflation has been raging for quite some time and has crossed double digits now.

“It is a very large component of the budgets of India’s families, and absolutely needs to be considered when setting monetary policy rates,” he said, adding: “The non-biological PM’s government knows only one trick: if the data doesn’t suit them, they will change the data altogether”.