RBI does what Budget could not

It's not a monetary policy; it's a credit policy of a governor who is not shy of experimentation when the space for monetary easing is limited

The Reserve Bank of India’s (RBI) latest monetary policy rushed in where the Union Budget feared to tread. On the expected lines, it refrained from a rate cut but unleashed a stimulus package with a mission to support growth through a string of actions that should bring down the cost of money for banks and encourage them to lend to the stressed sectors such as real estate, automobile and macro, small and medium enterprises (MSMEs).

In some sense, it is an extension of the Budget. But, unlike the Budget, both the bond and equity markets lapped up the status-quo and