Markets Need To Align With Easing Inflation, Says RBI MPC Member Ashima Goyal

The consumer price index (CPI) inflation is progressing well towards the target of 4 per cent and wage growth in India will have to be aligned with that, says Ashima Goyal, external member of the Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC).In an exclusive interview with Outlook Business, she said, “Markets will not deliver on high wage expectations unless there is excess demand for labour, which is not the case at present, except in a few pockets, where productivity is also rising.”In the minutes of the MPC’s meeting held on June 7, she argued that supply shocks were no longer having any significant impact on inflation or inflation expectations, and therefore, joined fellow external member Jayanth Varma in voting for a rate cut.Edited Excerpts:

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