It papers that RBI is in a hurry to control the inflation and probably that is the reason we have seen successive 11th times RBI squeezing liquidity in the market.
However RBI has to also take a pragmatic view on the situation and should not consider only tightening of liquidity as a panacea to all the problems of the economy because by virtue of CRR hike is making every thing costlier; from buying homes and motor cars, to the construction of roads and bridges. This means that growth of the nation will slow down as demand is receding.
The lasting solution to this problem is to increasing production on all fronts namely agricultural and industrial production and we will have to support Anna Hazare for strong Lokpal bill as checking corruption, will immensely help Indian economy and not to forget get back money stashed overseas in lockers as black money.
