The Economic Survey agrees with the CSO’s estimates of 6.9% growth in the current fiscal. That would imply it also agrees that growth bottomed out during the December 2011 quarter, when it fell to 6.1%. In the current quarter, growth is expected to rebound to 6.9%, according to the CASO’s computations.

In its mid-quarter review of monetary policy on Thursday, the Reserve Bank of India sang a similar tune. It said the performance of the economy in Q4 is expected to be better than in Q3. It also refers to the fact that the Purchasing Managers’ Indices remain in expansionary mode. The question is: If, as is well known, the RBI thinks that the non-inflationary sustainable rate of growth for the Indian economy is around 7% and if growth is, according to the CSO’s calculations, going to be around 6.9% in the current quarter, does it leave any scope for rate cuts? That is one dilemma that RBI faces.

Also Read | RBI keeps key rates unchanged

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