RBI Governor Raghuram Rajan's first remarks (no, not on his return to academia) on the monetary policy, inflation and rate cuts after the weekend shocker.

Rajan says that the monetary policy committee is a revolutionary step in fight against inflation.

"High inflation has been with us in India for the last four decades. There is a positive correlation between inflation and growth and we can never abandon inflation to focus on growth and we can never abandon inflation to focus on growth.

"By focusing on low inflation, we are abandoning old ways that benefited the few at the expense of majority poor. RBI can never abandon inflation to focus on growth. RBI was wise to disregard advice on further rate cuts."


Rajan has in fact cut rates as inflation has cooled. The repo rate at 6.5 per cent are the lowest since 2011. But his critics, especially the government has accused him of not cutting rates and impeding growth, the platform on which the Modi government came to power.


The RBI governor also said he was confident the government and the new RBI chief would internalise frameworks and institutions that have been set up and ensure low inflation future.