India, Oct. 8 -- That the Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) would increase the policy rate was a given. It has done so by 25 basis points, in keeping with expectations. What was watched more keenly was MPC's prognosis of the larger economic situation. On that front, it has not held back from underlining the inherent tension in the Indian economy: resilient domestic momentum against a multi-faceted turbulent external economic environment.

India's growth forecast for the fiscal year has been revised upwards from 6.7% to 7.1%. The biannual Monetary Policy Review says that unless there is a major disruption, GDP growth will be 7% in 2027-28 . The inflation forecast has been moved up from 5% to 5.2%. Expected ...