With growth number springing a positive surprise, will RBI continue with status quo on rates or is there a chance of a rate cut? @latha_venkatesh discusses with CNBC-TV18 Citizens’ Monetary Policy Committee.

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The Reserve Bank of India (RBI) has been maintaining a status quo on rates for quite some time now, but there are indications that a rate cut might be on the cards in the coming months.

This is largely due to the formation of a Citizens’ Monetary Policy Committee (CMPC), which was set up to provide a more diverse view on monetary policy decisions. The CMPC is made up of representatives from various sectors, including agriculture, industry, banking and finance, and consumer groups.

The CMPC’s formation marks a significant departure from the traditional approach to monetary policy-making in India, where the RBI governor and a handful of key officials hold almost complete control over interest rate decisions.

The CMPC is expected to meet regularly to discuss the state of the economy and make recommendations to the RBI on whether rates should be cut, raised, or left unchanged.

However, it is important to note that the RBI will ultimately make the final decision on monetary policy, and that the CMPC’s recommendations will be advisory in nature.

Despite this, there is a growing expectation that the CMPC will push for a rate cut in the coming months, given the current state of the economy. India’s GDP growth rate has slowed significantly in recent months, and inflation remains relatively low.

Furthermore, there are concerns that high interest rates are hampering investment and growth in key sectors of the economy, such as manufacturing and infrastructure.

On the other hand, there are also arguments in favour of maintaining a status quo on rates. Some analysts argue that lower interest rates could lead to a rise in inflation, and that the economy is not yet strong enough to support a rate cut.

The RBI has also signalled that it will continue to monitor global economic conditions, including the ongoing trade tensions between the US and China, before making any decisions on interest rates.

Ultimately, the decision on whether to cut rates or maintain a status quo will depend on a range of factors, including the state of the economy, inflation, global economic conditions, and the recommendations of the CMPC.

It remains to be seen whether the CMPC will have a significant impact on monetary policy decisions in India, but it certainly represents a shift towards a more democratic and inclusive approach to policymaking.