India, Oct. 2 -- The Reserve Bank of India (RBI) now believes that the Indian economy will grow at 6.8% in 2025-26. This is higher than RBI's 6.5% projection made in August. It has also made a downward revision to its inflation forecast for the current fiscal year from 3.1% in August to 2.6% now. This is the lowest-ever inflation, although within the 2%-6% target band of RBI, since the current series started in 2012-13. And a 6.8% growth rate is above India's potential growth rate. These numbers paint a very good picture for the macro economy that seems to be doing good in terms of growth without triggering inflation. Is the Indian economy in the so-called Goldilocks state, where it is neither too hot nor too cold? There is good reason to exercise some caution in jumping to this conclusion. It is very likely that some of the upward revision in growth forecast is on account of indexation issues - inflation ending up lower than expected - rather than a discernible rise in actual economic momentum. This was evident and seconded by many analysts when the June quarter GDP numbers were released in August. To be sure, this does not mean that GDP numbers have been doctored to look good. But it does mean that the nominal growth rate - it is not the monetary policy committee's mandate to project these - will likely end up lower than the budgetary forecast of 10.1%. This could lead to a squeeze in the fiscal room available to the government. Given this backdrop, the MPC is justified in not having cut interest rates in October. It is best that RBI waits for clarity on the impact of both the headwinds - tariff- and trade-related - and tailwinds - from GST reduction and the income tax reductions announced in the budget - to economic activity before cutting rates once again. In the meantime, it would be prudent to facilitate transmission effects and also make other changes, which are targeted as specific sectors of the economy, among them export-focused industries. Some of the announcements by RBI and the MPC resolution are indeed focused on this task. The Indian economy isn't in as sweet a spot as the latest growth and inflation projections suggest it is - but there is nothing that suggests a deep-rooted crisis as well, and this is exactly why the MPC's pause is a prudent one....