Ravindra Dholakia, the Reserve Bank of India's policymaker who has doggedly stuck to his stand on the need for a policy rate cut while voting against his five cohorts at credit policy review a fortnight ago, has argued that inflation control won't be a big issue in the near future - that is, over the next six to 12 months.

The IIM Ahmedabad professor has been a policy contrarian and voted since June for a 25 basis point rate cut in the policy rate that currently rules at 6 per cent.

"The real cause of concern right now is the economic recovery and its slow pace. Fiscal space is more or less exhausted but the space for the monetary boost has fortunately been available now for a relatively long period. Had the policy rate been cut to 5.75 per cent in June 2017 as I had argued then, the economic recovery would have been far more rapid and we would have been in a much better position," the professor was quoted as saying in the minutes for the latest monetary policy meeting released today.

"Although we have missed the bus, it is still better late than never. In my opinion, we must cut the policy rate by at least 25 basis points to begin with if we want to be on conservative side, because enough space existed all along," Dholakia added.

He is the only policymaker on the six-member MPC whose views are completely in sync with those of the mandarins in the finance ministry who have been trying hard to budge the RBI towards a rate cut.

The majoritarian view within the MPC is that the upward trajectory in non-food, non-fuel inflation is likely to continue in the near term. Housing inflation is also expected to rise in 2018, fanned by the staggered impact of housing rent allowance (HRA) increases to central government employees "which is expected to peak in December".

The recent rise in international crude prices on account of the Opec's decision to maintain production cuts through next year and the possibility of an "adverse supply shock due to geo-political developments" prompted five of the six policymakers to stand pat on the repo rate.

"On the whole, inflation is estimated in the range 4.3-4.7 per cent in Q3 and Q4 of this year, including the HRA effect of up to 35 basis points, with risks evenly balanced," the minutes of the meeting said.

Dholakia, however, disagreed strongly with this view.

"The RBI's expectation about the headline inflation in the remaining two quarters of 2017-18 is in the range of 4.3 to 4.7 per cent. If we exclude the pure statistical effect of revisions in the house rent allowance by the 7th Pay Commission for the government employees, the range of the RBI forecasts of both the headline and CPI excluding food and fuel show the relevant inflation rate hovering around 3.9 to 4.3 per cent over the rest of the year. Thus, there is a clear space for the rate reduction of at least 25 basis points even without considering the output gap," he added.

The IIM professor believes that there is a crying need to ratchet up growth - with the impetus being provided by a rate cut.

"As against RBI's expectation of 6.4 per cent, the growth of real GVA during the quarter turned out to be only 6.1 per cent. Yet, the RBI has not revised its growth forecast from the earlier 6.7 percent for the year 2017-18. This implies that RBI now expects a higher growth of 7.0 and 7.8 per cent respectively in the third and fourth quarters of 2017-18. This is highly improbable to be achieved without any policy rate cut because fiscal space is practically non-existent," he added.

He argued that there were serious implications of keeping the real policy rate substantially higher than most other countries in the world. He argued that only 11 countries in the world had a "positive real policy rate" - and several of them either are in some crisis or have recently emerged out of a crisis.

"Among the rest of the countries, India has the highest real rate. If the situation is not corrected soon, it has the potential to destabilize the financial markets at home by discouraging domestic investments and encouraging foreign investment in the debt market. It may involve substantial risks for future," Dholakia added.

Echoing the majority view, RBI governor Urjit Patel said: "Inflation is now projected to be marginally higher, going forward, as the recent increase in oil prices is likely to sustain. Food inflation, led by vegetables, remains highly variable, while deflation in pulses continues."

"The recent upturn in crude oil prices has emerged as a source of concern. Several uncertainties, especially on the fiscal and external fronts, persist. It is, therefore, important to be vigilant. Hence, I vote for status quo in the policy rate," Patel added.