GST launch should pave way for repo rate cut

RBI could wait for CPI inflation to settle and then reduce the repo rates

In the meeting held on June 7, the Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) decided not to cut the repo rate. The lone dissenting voice was that of IIMA professor Ravindra Dholakia, who wanted the repo rate to be reduced by at least 50 basis points from the present 6.25 per cent. The RBI, too, has reasons to abstain from a repo rate cut. After signing the new Monetary Policy Framework Agreement with the Union government in February 2015, the responsibility of maintaining Consumer Price Index (CPI) inflation becomes the only factor in deciding the