The latest WPI figures show an upsurge mainly on the rise of costs of vegetables and fruits. It will take some time before the rains come down to cool the prices. Essential commodities and pulses are also seeing no abetting of prices. Do these factors justify RBI's claim on softening monitory policies? The supply demand mismatch is another worrying factor. It must be seen whether the rain gods favour a robust agricultural growth. Right now the agricultural sector is in the dumps, recording a growth of around 2%, which is in shining contrasts with the growth in other sectors of the economy.
The banks now have to play their part carefully. The processing and sanction of home loans and the conditions governing them need a re-look, and this is to be combined with a rigorous adherence to RBI guidelines. The quality of home loans disbursed by the private banks following an aggressive marketing policy, should come under the scanner of the RBI, especially the larger capped ones. The high growth story of Indian economy needs to be regulated with policies every now and than so that the common man can participate with less pain and more confidence.
