March IIP’s a disaster, but will Subbarao budge yet?

........However, while the Reserve Bank of India had anticipated the need for aggressive action and slashed the repo rate by a deep 50 basis points in its April policy, it’s not as if RBI Governor Duvvuri Subbarao will rush to the phone to consult bankers and look at another round of rate cuts after looking at the latest IIP print. In fact, Subbarao had, even while announcing the April rate cut, given a clear indication that by its own reckoning the growth rate estimate of 7.3 percent for FY13 (2012-13) was near what should be India’s trend rate—or non-inflationary growth rate—of 7.5 percent. The RBI had made it amply clear that the headroom for further rate cuts is limited.....................

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