India, June 5 -- 2025-26 for the Indian economy was the perfect Goldilocks moment. Benchmark inflation, as measured by the Consumer Price Index (CPI) was 2.1%. GDP growth, as per the provisional estimates released on Friday, was 7.7%. The economy has moved from Goldilocks to tenterhooks. RBI's latest growth and inflation projections for the economy for 2026-27 stand at 6.6% and 5.1%. That entails a downgrade of 1.1 percentage points in growth and 3 percentage point increase for inflation. The adverse growth-inflation dynamic has its roots in the ongoing war in West Asia; India has next to no control over the geopolitical state of play but will have to pay a huge price for its geo-economic fallout.

The MPC resolution, released on Friday, ...