Chief Economic Adviser Arvind Subramanian on Wednesday disagreed with the Reserve Bank of India’s decision to keep repo rates unchanged at 6.25%. “Headline inflation has been running well below the target so far,” he said, according to PTI. “Core inflation has also declined sharply. In this view, inflation forecast errors by the RBI have been large and systematically one-sided in overstating inflation.”

Subramanian said while he respected the RBI’s decision, there was a “plausible alternative macroeconomic assessment”, PTI reported. As per this alternative view, the inflation outlook has been encouraging by an “appreciating exchange rate, a good monsoon and a capping oil prices by structural shifts”, he said according to Mint. “In recent times, seldom have economic conditions and the outlook warranted substantial monetary policy easing.”

Some are seeing his remarks as signs of a split between the finance ministry and RBI.

Subramanian said growth has reduced from July because of real gross value added, capital formation, capacity utilisation in the industry among others. “Even personal loan growth that proxies for consumption has recently been decelerating,” he said, according to Mint.

Meanwhile, RBI Governor Urjit Patel on Wednesday said the six-member monetary policy committee unanimously had declined to meet the finance ministry officials ahead of the policy review, PTI reported. The MPC was formed last year to decide on repo rate and the stance of the monetary policy with a clear mandate to get inflation down to 4%.