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Risks to India's growth are higher than the risk of further inflation as major drivers of price increases are dissipating, justifying a pause in further rate hikes, Jayant Varma, an external member of the country's monetary policy panel said on Thursday.

The Reserve Bank of India has raised rates by a total of 250 basis points since May last year as it tackles stubbornly high prices.

Those rate hikes would work their way through the economy and choke demand, Varma, who along with a second external member Ashima Goyal voted against the latest quarter-point increase earlier this month, told Reuters in an interview on Thursday.

"Just the fact that we see big numbers (on inflation) in January and February ... doesn't mean that we ought to tighten now," he said.

Varma said government spending support to the economy was going to reduce in the next fiscal year as New Delhi announced a significant reduction in the fiscal deficit in its budget on Feb. 1.

Exports have been ticking down as well, he added.

Private capital expenditure was unlikely to pick up in the absence of strong demand, and though private consumption in the country seemed to be holding up, it was being driven by the top 5%-10% of the population, Varma said.

"I always think of the economy as an aircraft flying on four engines. All four engines are revving down, so what is going to happen to growth?"

The professor of finance and accounting said monetary policy globally had become complacent about inflation initially, before switching gears.

"I sometimes describe it as monetary policy driven by a guilt complex - that we goofed up a year ago, so we should not make the same mistake, but it is okay to make the opposite mistake."

The Fed delivered a string of 75-basis-point and 50-basis point rate hikes in 2022, raising the key rate by a total 450 bps, in its battle to curb inflation that had climbed to 40-year highs.

India's monetary policy panel failed in its mandate to keep inflation within the 2%-6% band, with it breaching the upper tolerance limit for three consecutive quarters to September 2022.

Latest reading for January showed annual retail inflation rose to 6.52%, yet again rising above the central bank's upper threshold for the first time in three months and raising concerns around at least one more rate hike.

"I'm not saying that we will never raise rates. I am saying we should wait and see what is the impact of what we have already done. And if we find that that's not enough, raise rates at that point".

"I think 2022/2023 is going to be very bad for inflation, there is no doubt about it. But what I see is that the major drivers for that have dissipated."

In particular, lower crude prices will eventually filter through to retail prices, helping pull down inflation, Varma said.

"We know there is a gift packed and ready, it is a question of when it will come."