Beyond the rate cut

RBI alone will not be able drive economic recovery

The Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) is widely expected to cut the repo rate once again this week. Although the inflation rate based on the consumer price index inched up in June, it is unlikely to cross 4 per cent in the near term. However, the bigger question at this stage is: Will another rate cut be enough to revive economic activity?

The Indian economy is in the midst of a severe slowdown and indicators such as vehicle sales, corporate results, and the latest core sector data suggest that growth in the first quarter