One of the issues that dominate public discourse in India is, in fact, whether the Reserve Bank has reached neutral levels of policy rates, whatever they may be. BIS Review 131/2010  3  The interest rate differentials between advanced economies and EMEs have naturally triggered capital flows into EMEs putting upward pressure on their currencies and complicating their macroeconomic management.
Employment has increased impressively over the past six years since its low point in early 2010, and the unemployment rate has hovered near 5 percent since August of last year, close to most estimates of the full-employment rate of unemployment. The economy has done less well in reaching the 2 percent inflation rate.