The Urjit Patel report comes as the economy is going through a difficult time. It develops an excellent framework for liquidity management. But over-reacting to recent experience, as it does, isn’t a good way to design a framework. Its argument for choosing a strict headline CPI inflation-based nominal anchor is that it is necessary to anchor household inflationary expectations. But its own empirical exercise shows food inflation to have the greatest effect on household expectations. Despite monetary tightening reducing growth with little effect on inflation over the past few years, the argument seems to be we must do more of what has not worked. So, a strict focus on inflation is asked for to rescue the RBI from considering growth at all.The report admits that worldwide, inflation-targeting central banks implement flexible inflation-targeting with weight given to output gaps and unemployment, and post-crisis also to financial stability. But the argument seems to be since large output gaps do not seem to affect inflation, they can be allowed to widen further! In the report’s view, there is no growth-inflation trade-off, and inflation is hurting growth. But analysis of the trade-off has to include supply shocks in Indian conditions. These raise inflation while growth falls under conventional tightening. Policy that reduces inflation expectations yet maintains demand is required. But if there are multiple supply shocks, a subtler response is feasible. The key requirement is to improve coordination between government and the RBI, since what the government does raises food inflation and what the RBI does hurts industry and employment. The report is sensitive to the financial sector. Inflation-targeting will make policy more transparent. Other measures on liquidity management can deepen markets and improve transmission of policy rates. But there is no analysis of transmission to the real sector.