It seems that the Policymakers recognized the need to put the economy on a high notch. Just days after the data released that showed India outpaced China by growing 7.5% in the March quarter, RBI takes a leap further and cut the interest rates for the third time in a row, this year. This time the cut was 25 basis points.

While many economists, inside and outside the government suspects the ‘new way’ used to calculate gross domestic product, RBI Governor Raghuram Rajan confirms that it never overstated how fast the nation is rising. Keeping the nation amused, he announced third cut in a row.

The news played the symphony in the ears of many Investors. It is music for individual borrowers as well. 

Raghuram Rajan also confirms that the ‘new way’ has not overstated how fast India is rising.

"With low domestic capacity utilization, still mixed indicators of recovery, and subdued investment and credit growth, there is a case for a cut in the policy rate today," the RBI said in a statement.

The RBI also warned it would keep a track of inflationary trends, citing risks posed to food prices if monsoon rains are weaker than expected, or global crude prices recover, or the rupee weakens due to volatility in global markets.

"A more appropriate stance is to front-load a rate cut today and then wait for data that clarify uncertainty. Meanwhile banks should pass through the sequence of rate cuts into lending rates," the central bank said.