Off-date rate cut, again...

Today, again, our RBI Governor reduced repo-rate by a quarter basis points, from 7.75% to 7.5%... But, commentators were trying to find out reasons that resulted in a rate cut without having reference to the latest data... The data for CPI is 5.11% is almost a month old... In January Rajan too delivered a rate cut on an off-date which experts attributed to falling oil-prices and confidence in the inflation glide-path... Nonetheless, the effect of falling oil and transport price/cost is yet to appear in data... May be this time too Rajan has assumed lower prices on the occasion of falling crude-prices and delivered a rate-cut earlier than expected... This time budget too might be responsible for a rate cut... Experts were expecting a rate cut after the budget, but not this soon... on an off-date... which is good from the point of view of ‘timing’... The commitment for fiscal-credibility in the budget has given space to monetary easing, nevertheless for more capital expenditure or infrastructure investment we will also need lower rates... Many times economists reiterate that to remove supply-side bottlenecks we need more investment... The current rate-cut is in line with the current line of thought... Rajan is a supply-side economist too...It is the time to relook at our multi-brand-retail-policy... We need more investment in food-supply-chain-management, in retailing... Good food yet remains out of reach of poor because of prices... Good supply will reduce prices...