.......It appears that the RBI has taken the decision to avoid surprising the markets, even positively. Past governors of the RBI have been known to deliver positive surprises that can shift the markets, and initiate pre-emptive or anticipatory moves to deal with negative developments on the horizon. It appears the current dispensation in the RBI underestimates the usefulness of such actions. It is far from certain whether that is the correct approach at a time when India should be worried about an “investment cliff” — the fact that investment has collapsed, that there are no orders in the pipeline, and that manufacturing has essentially stopped expanding. The full effects of this freeze have still not played themselves out, and counteractive action from the RBI to support the private sector in advance might have been indicated.........
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