Best of the Week: A surprise RBI rate cut—and the inflation story behind it

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The central bank trimmed the repo rate by 25 basis points to 5.25%, even though most economists were betting on a pause. The move follows a record-low retail inflation rate of 0.25% in October, giving the Reserve Bank of India (RBI) the breathing room it needs to lower borrowing costs. And yes, the RBI is still sticking to its “neutral” stance, which basically means: We’re keeping our options open.

What makes this more surprising is that India’s gross domestic product (GDP) numbers for the September quarter were stronger than expected, which usually makes central banks hold back on cuts. But governor Sanjay Malhotra explained that while growth is still solid, it may ease a bit going forward. Even so, the RBI has revised the GDP forecast upward to 7.3%, signalling confidence in the economy’s underlying momentum. The real kicker? The growth-inflation balance looks better than it has in years, especially with food prices staying unusually calm.

Inflation forecasts for the next year have now been lowered to 2%, comfortably inside the RBI’s 2-6% comfort band. That’s a sharp drop from earlier projections, helped by goods and services tax (GST) pass-throughs, softer food prices, and base effects working in India’s favour. After 100bps of cuts earlier this year and a long pause since August, the RBI seems to be saying: The data finally supports loosening things a bit more. So, is this the start of a rate-cut cycle? The RBI isn’t promising anything—but it’s definitely leaving the door wide open.

On to the best of Mint’s journalism from this week:

A weak Rupee’s harsh reality

Is a weaker rupee really a blessing—or just an illusion? Despite slipping past 90 per dollar, exporters say the currency boost barely moves the needle against Donald Trump’s crushing 50% tariffs. Apparel makers, electronics players, even pharma firms—everyone’s feeling the squeeze as import costs soar and US orders dry up. The only ones smiling? India’s IT giants, who get a sweet margin bump every time the rupee dips. But with capital outflows rising and hedging costs climbing, how long can the rupee pain deliver selective gains? And more importantly, are we prepared for what comes next?

Why IIT talent won’t stay for just money

Campus placement season is heating up, and companies are throwing everything at IIT talent—fat joining bonuses, shiny stock options, and even clawbacks. But will money alone keep top engineers from jumping ship? High-frequency trading firms are offering instant bonuses, tech giants are dangling restricted stock units, and even traditional companies now attach clawbacks to ensure fresh hires stay put. Yet insiders say retention won’t be about the perks—it’ll be about meaningful work, global exposure, and roles that actually excite young talent. After all, what’s the point of a bonus if a better offer comes knocking tomorrow?

Sanchar Saathi U-turn

So, was Sanchar Saathi meant to protect us—or watch us? After public pushback, the government has rolled back its decision to make the spam-reporting app mandatory on all devices. While officials insist it’s a tool to fight digital fraud, privacy experts argue it isn’t a real cybersecurity shield and—even worse—collects sensitive permissions like call logs and SMS access. With phone makers resisting and citizens questioning intent, the bigger dilemma remains whether voluntary reporting can truly stop India’s scam epidemic. Or does the fix lie elsewhere?

Why IndiGo is feeling the burn of new pilot norms

If your IndiGo flight’s been delayed this week, you’re not alone. With hundreds of cancellations, India’s biggest airline is scrambling to cope with new flight duty-time limits that demand more pilots, stricter night-duty caps, and longer rest hours. But did IndiGo ignore the warning signs? Other airlines adjusted early, but IndiGo’s massive network—600 routes and tonnes of overnight flights—meant the new rules hit like a storm. As the DGCA probes and schedules stay shaky, travellers are left wondering: When will India’s busiest airline finally steady its wings?

UPI’s decade of dominance

It’s hard to believe UPI has been around for almost a decade, because at this point, can you even imagine life without it? From buying milk to paying EMIs, Indians made 636 million UPI payments every single day in November. But while UPI is exploding in volume, the average payment size keeps shrinking—now just ₹1,300. Why are we paying more often but smaller amounts? And what does it say about how India spends today? Groceries, eating out, debt repayments, stock investing—UPI is everywhere. But can it truly make India fully cashless? That will depend on bringing low-use states up to speed.

Adani rights issue signals a broader revival in shareholder-led fundraising

Adani Enterprises’ ₹24,930 crore rights issue has put an old fundraising tool back in the spotlight. A rights issue lets existing shareholders buy new shares at a discount, and if Adani’s offer is fully subscribed, it will help make 2025-26 one of the strongest years for rights issues in nearly a decade. Even before this, activity had picked up, with more companies using this route instead of relying on a few large issuers, as was the case in 2019-21. What stands out now is the wider participation: mid-sized and second-tier companies are raising meaningful sums, and most issues are getting fully subscribed. Despite this momentum, rights issues remain less popular than IPOs or preferential allotments because they take longer and involve all shareholders. Sebi’s recent rule changes aim to address this by significantly reducing timelines. Whether rights issues continue to gain favour will depend on market sentiment, valuations, and how eager promoters are to avoid diluting control.

The farm price deflation that threatens to halt India’s rural demand surge

Farmers across key states are heading into winter on shaky financial ground as a sharp, broad-based crash in crop prices erodes incomes and forces families to cut back on big purchases. Heavy rains damaged premium paddy in places like western Uttar Pradesh, while prices of staples such as potatoes, onions, soybeans, and pulses have plunged far below government support levels. Many farmers say they are barely recovering costs after paying for labour, fertilizers, transport, and cold storage. The distress is showing up in household decisions, with plans for new vehicles or home repairs now on hold. Although rural consumption indicators like FMCG sales and two-wheeler demand look healthy on paper, the mood on the ground is far more anxious.

Meesho’s logistics bet that could define its future

Meesho’s rise in India’s small towns owes much to Valmo, its in-house logistics layer that quietly brought order to fragmented delivery networks. For sellers in cities like Indore, Valmo made pickups steadier and shipments easier to track. In metros, it improved clarity and reduced disputes. Unlike Amazon or Flipkart, Meesho doesn’t run its own fleet. Instead, Valmo coordinates thousands of small couriers, using data to route parcels efficiently and cut costs. As Meesho lists publicly, Valmo’s ability to reach low-density regions, manage cash-heavy deliveries and keep partners reliable will be central to its long-term economics and investor confidence.

Ola Electric’s unallocated costs trigger questions

Ola Electric’s latest results have drawn scrutiny because about 12% of its total quarterly costs were classified as unallocated, nearly twice last year’s level. This accounting choice helped the company show a small Ebitda profit in its two-wheeler business even though it posted a consolidated Ebitda loss. While unallocated expenses are allowed, experts say such costs typically stay below 5% and Ola’s inability to break them down is unusual. Investors have reacted sharply, and the stock has slid as rivals report no such expenses. The company says these costs reflect shared functions and recent revenue decline.

Mutual fund boom leaves distributors struggling amid lower fees and rising online shifts

India’s mutual fund boom hasn’t lifted distributor fortunes. Even as equity assets grew nearly tenfold from 2015 to 2025, distributor numbers rose only 2.5 times, and their business models came under strain. Lower commissions, repeated regulatory cuts to total expense ratios, and the surge of direct-plan investing through fintech apps have sharply squeezed incomes. The proposed 15bps TER reduction may worsen the slowdown, echoing the hit distributors took after the 2018 rule changes. With falling incentives, rising consolidation, limited training support from fund houses, and investors shifting online, many small distributors now face tough choices about survival.

That's all for this week. I hope you have a pleasant weekend!

If you have feedback, want to discuss food, movies and shows, or have anything else to say about our journalism, write to me at shravani.sinha@livemint.com or reply to this email. You can also write to feedback@livemint.com.

Best,

Shravani Sinha

Senior Correspondent