Former Reserve Bank of India YV Reddy, in an exclusive interview to CNBC-TV18, said that neither growth nor inflation should drive interest rate policy. Reddy, who recently collaborated with economist Deena Khatkhate on the book 'Of Economics, Policy, and Development: An Intellectual Journey by IG Patel', believes the correct rate is one that promotes savings.
The book was launched by current RBI governor Subbarao at the RBI headquarters on Wednesday evening and is published by the Oxford University Press.
Indraprasad Gordhanbhai Patel (November 11, 1924-July 17, 2005) was the 14th RBI governor and served a five-year tenure from December 1977 to 1982.
Below is an edited transcript of the interview on CNBC-TV18.
Q: What motivated you to bring out this book? What guided you when choosing the chapters? What should we as students of economics try to glean from this book?
A: I have been an admirer of IG Patel even when I was in the university. He impressed me as somebody