.. must confess that I was a little – and pleasantly – surprised by the Reserve Bank of India’s (RBI’s) volte-face in last week’s credit policy. From an unwavering focus on inflation management that it reiterated in its September review to acknowledging the need to “contribute to stimulating investment activity” is, in my scheme of things, a major change in stance. What could have driven this? I suspect the RBI has woken up to the fact that growth conditions are far direr than it had anticipated. It revised its growth projection for 2011-12 down from eight per cent to 7.6 per cent. Its projections for 2012-13 are possibly worse.....
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