ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846
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A New Growth Consensus?

The Reserve Bank of India and the government are taking contradictory approaches on liquidity and interest rates. The one eases liquidity but keeps interest rates high, the other promotes debt-financed consumption and pushes for cheaper consumer credit. This seems to be a new growth strategy based on a combination of liquidity infusion and interest rate reduction for consumer loans. But is this prudent? What of the fragility of the financial sector?



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