Mumbai, Oct. 5 -- Rising crude oil prices and monsoon deficiencies are escalating cost pressures, making a compelling case for monetary tightening, according to Dipti Deshpande, Principal Economist at Crisil.

Speaking to ANI in Mumbai on Monday in an exclusive interview, Deshpande highlighted the growing stress on input prices. "Oil prices last time were around USD 85... Now they are closer to USD 120, at least for the Indian basket," she said.

She warned that with a 13 per cent rainfall deficit in the southwest monsoon, "producers will start to pass on these retail prices because they would not want to crimp their profits even further," ultimately pushing up core inflation.

Despite rising borrowing costs, private capex and corporate i...