The Economist had criticized the demonetization move taken by Indian government to withdraw 86 per cent value of cash in circulation. Nevertheless, millions of Indians spending below $ 2 per day appreciated the demonetization drive so far as they feel it would bring out into the open unaccounted cash from tax evaders.
The Economist wrote a piece that warned of the dire consequences of India's demonetization initiative. A RBI official said critical reporting by The Economist had nothing to do with their decision to keep the journalist out of the RBI Governor's press conference.
Some of the social activists and anti-rightwing elements also used the opportunity to express their dismay at government functioning.
Meanwhile, Reserve Bank of India unexpectedly held the key policy rates unchanged due to the fear of rising crude prices in the wake of recent consensus reached by OPEC countries to cut crude output. "On the basis of an assessment of the current and evolving macroeconomic situation at its meeting, the Monetary Policy Committee decided to keep the policy repo rate under the liquidity adjustment facility unchanged at 6.25 per cent," reads a statement released by Reserve Bank of India.
Outlook for growth of the economy has also been downgraded by RBI largely due to the effects of the withdrawal of higher denomination currency from the market. Incorporating the expected loss of growth momentum in third quarter and waning effects in fourth, growth for 2016-17 has been revised down from 7.6 per cent to 7.1 per cent by the RBI.