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Management consultant, Mr H.S. Rajashekar, believes that the RBI’s action on the repo rate front would spur growth and improve market sentiments.
“While the 50 basis points cut has been a pleasant surprise as the general expectation was only 25 bps cut, the policy prescription and timing have been perfect,’’ he said.
“The RBI had, in its earlier policy reviews, recognised the deceleration of growth as a matter for concern; in the absence of any definite action, there was a feeling that the RBI was over-doing its focus on inflation. This present action should negate such apprehensions,’’ he added.
On timely intervention, he said: “the RBI could have cut the rate in March itself, before the Budget, but probably chose to wait and look at the Government’s plans for fiscal consolidation apart from further confirmation on growth and inflation trends. However, it is now clear that the regulator’s policy prescriptions are of its own accord and accountability, based on the numbers and assumptions articulated in its ‘Review of Macro-economic and Monetary Developments for 2011-12’ released early this week.’’
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