How to make the horse drink water

For ideal monetary transmission, we need two benchmarks - one for loans and another for deposits

When it comes to monetary policy, a career bureaucrat could be more innovative than an economist. Reserve Bank of India (RBI) governor Shaktikanta Das has proved that.

After taking three baby steps since February, when the rate cutting cycle started, he changed track last week: No more baby steps (25 basis points or bps rate cut); not a giant step (50 bps) either. He followed the “golden mean” of the Buddhist philosophy — a 35 bps rate cut, bringing in the policy rate to 5.4 per cent.

Indeed, it was the decision of the rate setting body of the Indian