Gloves off in spat between Delhi and the central bank

Mumbai

TENSIONS boiled over between India's central bank and the government of Prime Minister Narendra Modi, as Asia's third-largest economy faces its weakest growth in two years and record low inflation.

Six months after setting up an independent committee to oversee interest rates, the government is openly expressing frustration that the Reserve Bank of India chose not ease monetary policy on Wednesday. Economic conditions warranted a substantial monetary easing, said chief economic adviser Arvind Subramanian just hours after the central bank kept its benchmark repurchase rate unchanged as expected at 6.25 per cent.

"I think there is a plausible alternative macro-economic assessment," Mr Subramanian said at a media conference in New Delhi. "Inflation forecast e…