Normalisation delayed

Monetary policy will not drive growth

The Reserve Bank of India (RBI) has postponed the next step in normalising monetary conditions. In its first meeting after the Union Budget, the RBI’s Monetary Policy Committee (MPC) decided to keep the policy rate and stance unchanged. While this much was on expected lines, the RBI also decided to leave the reverse repo rate untouched. Several commentators, including this newspaper, had advocated normalisation of the policy corridor. It is not clear what restrained the RBI —the reverse repo rate is outside the remit of the MPC. As RBI Governor Shaktikanta Das noted in his statement, the weighted average rate