Wednesday’s unsurprising Reserve Bank of India (RBI) decision to leave its policy rate and neutral stance unchanged while mildly raising its inflation forecast for the second half of this fiscal has put the task of spurring the economic recovery, of which there is scant evidence so far, more in the hands of a fiscally stressed government. Announcing the Monetary Policy Committee’s decision to keep the repo rate at 6% in the wake of a “sharp uptick in momentum” of retail inflation, RBI governor Urjit Patel said: “We have a neutral stance, which means that depending on the data flow (on growth/inflation) in the coming months and quarters (we) will determine…the policy.”

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