The Credit Policy announced by RBI was overshadowed by Mr Karunanidhi’s statement to withdraw support to the UPA government. The RBI Governor’s announcements were on expected lines – Repo rate cut of 25 bps, from 7.75% to 7.5% and Reverse Repo cut 25 bps to 6.5% from 6.75%. CRR was left unchanged. This the markets had factored in. Further jitters to both equity and bond markets were more to do with DMK then to do with CRR. Reading between the lines, the Governor’s comments on inflation, investment slowdown and current account slowdown, indicates that sharp rate cuts in future are unlikely. The Governor has responded pragmatically to the domestic macro economic situation. He has kept his eyes on not only inflation, but also the current account deficit, which are dependent on foreign inflows.  Most bankers were expecting liquidity infusion measures and at this point, it is unlikely that the 25 bps cut will be passed on to the end customer. Going ahead, we think the RBI Governor will continue his battles to tame inflation. Apart from interest rates, the economy is suffering because of complete paralysis on the policy front and government’s delivery mechanism. India needs to get the investment cycle back on track to kick start the economy and for that to happen, more action is needed from Parliament Street and not Mint Street.