Quick Edit | Hobson’s choice

The Wholesale Price Index for May has inched up to 7.55% from 7.23% in April. For the last four months, it has hovered around 7.4%, higher than the Reserve Bank of India’s comfort zone.

At the same time, growth has slowed and there are fears—often couched in terms of a “new normal”—this could become a structural feature of the Indian economy. India, as Moody’s claimed on Thursday, is facing stagflation.

Is it? That’s a question that will be high in the minds of decision-makers at the central bank.

Food and fuel inflation are in double digits. The positive feature, at the moment, is that non-food inflation has declined consistently since November 2011.

There is no doubt that some steps are required to revive growth, but is a rate cut, when inflation and inflationary expectations are rising, the right instrument to achieve that goal?