Over the next few days, the RBI’s monetary policy committee will hold its last scheduled meeting for this calendar year. So far, the central bank’s “resilient” growth outlook provided the committee the space to keep the policy rate unchanged and focus on “attaining a durable alignment of inflation with the target”. However, since the last committee meeting in October, the macroeconomic scenario has changed dramatically — inflation has edged upwards, while growth has slowed down. In this changed environment, questions are being asked, including by the government, about whether the RBI has kept interest rates too high for too long, not anticipating the economic slowdown.

As reported in this paper, the government has raised........

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