Minutes of the Reserve Bank of India (RBI) show two policymakers resisted a tighter policy signal despite supporting an October rate increase, underscoring disagreement about how widely inflation has spread.
The Monetary Policy Committee (MPC) raised the repo rate by 25 basis points to 5.50% at its Oct. 5–7 meeting, with all six members voting in favor. MPC member Dr. Nagesh Kumar and MPC member Prof. Ram Singh nonetheless favored a neutral stance. Ahead of the minutes’ release, the rupee ended near ₹94.92 as the Nifty 50 fell 1.11%.
The committee adopted a stance it calls “calibrated tightening.” That leaves a pause or a further increase as its near-term options while officials assess growth and inflation; it does not commit them to another hike. The minutes identify food and energy costs and a deficient monsoon as inflation risks, along with the possibility that price pressures could spread more widely.
Kumar viewed inflation as largely driven by supply conditions and said it had not become widespread. Singh said expectations of substantial rate increases could deter vehicle and property purchases and slow business investment.
RBI Deputy Governor Dr. Poonam Gupta favored an earlier response because rate changes take time to affect inflation. She cited past policy action when inflation reached or exceeded the bank’s tolerance limits. RBI Governor Sanjay Malhotra pointed to a growing share of consumer price index items with inflation above 4%.
For fiscal 2026–27, the MPC expects consumer prices to rise 5.2% and real gross domestic product to grow 7.1%. Its forecast puts inflation at 6.0% in the fiscal third quarter.
After the vote, the Ministry of Statistics & Programme Implementation reported a provisional 5.54% annual rise in consumer prices for September, up from a final 4.83% reading for August.
The ministry schedules October inflation data for Nov. 12, with publication moving to the next working day if that date is a holiday. The MPC’s next meeting is set for Dec. 2–4.
