...With the benefit of hindsight, it could now be argued that the RBI had indeed assessed the ‘coming decline' and avoided the baby-step to lower the repo rate by a surprising 50 basis points. The RBI Governor had justified the big drop on the ground that monetary transmission took a longer time when rates were cut. That the RBI wasn't entirely whole-hearted in its action came out sharply when the monetary authorities kept insisting that there was little leeway for further cuts in the absence of tangible efforts on the fiscal side. The non-alignment of steps between the two managers — monetary and fiscal — is hurting the economy. Time and again in the past, the RBI has reminded the fiscal mandarins of the need for discipline but with little result.......
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