Economists are expressing concerns over potential interest rate cuts by the Reserve Bank of India (RBI) due to persistent high inflation. This concern has been raised following comments from Union Finance Minister Nirmala Sitharaman, who emphasized the need for more affordable bank interest rates to stimulate industrial activity and job creation.

However, experts caution that reducing rates too quickly could undermine the progress made in controlling inflation. As the RBI approaches its December monetary policy meeting, all attention is on Governor Shaktikanta Das and the decisions he will make.

M. Govinda Rao, an economist and former member of the Economic Advisory Council to the Prime Minister, has highlighted that a significant fiscal deficit requires higher interest rates. He has stressed the importance of maintaining a vigilant stance on inflation, indicating that the RBI may have limited options in this challenging economic landscape.