The Monetary Policy Committee (MPC) has been more concerned about global factors than domestic ones, former Chief Economic Advisor Arvind Virmani said on Thursday, adding the country needs faster rate cuts from the Reserve Bank of India (RBI).
"There are two factors — global and domestic. The MPC was much concerned about global factors, which is exactly what has happened, and much less about domestic factors," Virmani said.
The RBI left the key interest rates unchanged in its policy review on Wednesday.
"I have been recommending faster rate cuts. They should cut rates but they will not, given my understanding of the things that drive them. There should have been a rate cut now," he added.
"The RBI is behind the curve. There is 70 per cent probability of consumer price index (CPI) inflation between 4-5 per cent and there is 15 per cent chance of it being less than 4 per cent. On the basis of that, they should cut rates," Virmani said.