New Delhi, Sept. 30 -- Next Wednesday, the Reserve Bank of India (RBI), its Monetary Policy Committee (MPC) in particular, must try and make sense of India's matrix of macro data and decide whether monetary policy has a role to play.

Should it carry on as before and hold policy interest rates steady? Or signal discomfort with today's macro scenario and act to tighten credit? It's a tough call.

In the US, Europe and Japan, central banks have tightened policy. The Fed has hiked rates amid robust economic growth, while the European Central Bank has done likewise even though growth has been slow. In Japan, rates have been raised to a 31-year high. In all three cases, hikes were driven by a need to get inflation under control.

In India, lik...