The Reserve Bank of India’s decision to leave its policy rate untouched at 5.5 per cent is less about caution and more about recognition ~ it knows the easy wins from rate cuts have already been taken. Earlier this year, a full percentage point of easing and generous liquidity injections were delivered in quick succession. Now, the effects are trickling in slowly, and the returns, so far, are modest. The message is clear: when the problem is structural, cheaper money alone will not ignite a surge in growth. The growth outlook for the current fiscal remains pinned at roughly 6.5 per cent.

That figure rests heavily on the resilience of rural demand, buoyed by a favourable monsoon, while urban consumption continues to stall. Private sector investment plans, once the hoped-for driver of a new cycle, are being scaled back. In their place, the service sector – particularly construction and trade ~ is expected to........

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