RBI has kept its reputation of being on the ball. Rate hike could have been sharper and to the extent of 25 per cent basis point looking at the inflation figures however recent developments seem have restrained it to increase rate only by 25 basis point. Overall policy is positive for growth and equity markets as well. There was a need to augment funding for infrastructure which RBI has attempted by reducing provisioning norms for sub-standard infrastructure assets and treating toll collection rights, etc as tangible assets. These measures would help controlling inflation without consumption and growth getting affected. Market has rightly reacted positively to the policy.
However once the market come out of the influence of the current developments that have affected markets globally, RBI might surprise market again and further rate hike before next policy review can not be ruled out.
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