The Reserve Bank of India (RBI) has, in a first, acknowledged that the economy will contract in the current financial year — something that independent experts have already assessed. It is in this context that the central bank’s Monetary Policy Committee (MPC) cut the repo rate by 40 basis points (bps) despite a “highly uncertain” outlook on retail inflation. The MPC expected the high inflation rate to be short-lived, expecting it to fall below 4 per cent in the second half of the current financial year. Experts have countered this view. No one in the government was earlier of the