RBI policy: Low inflation and growth are the two key messages from RBI

The Reserve Bank may have a more optimistic view on inflation for the year even, though it has also recognised the risk factors

The first credit policy for the year is significant not so much for the expected rate cut but the modest assumption on growth in the coming year. At 7.2 per cent, it is marginally higher than the 7 per cent for FY19, and that is not very encouraging. This also means that since the RBI has lowered its inflationary estimates for FY20, which is to peak at 3.5-3.8 per cent in H2-FY20, there are indications of more rate cuts ahead. 

The focus now is clearly on using interest rates as a policy to spur growth. The question is whether this