You don’t want to kill growth, but bring inflation within bounds. The danger of letting inflation go beyond 5-5.5 per cent is it will become entrenched in people’s expectations. At 6.12 per cent, it is already beyond the upper limit. How persistent is this and how much will lower oil prices feed in to bring it down, Rajan asks.

Similarly, commodity prices — do they reflect speculative activity? If they do, quelling speculation might be useful. But is it largely because people are growing richer and there is greater demand for foodgrains. And the supply is limited. It is true that foodgrain production has been stagnant in India and there is a supply constraint. This means you have genuine inflation, not one driven by speculators, feels Rajan.