RBI's El Nino moment

.Central Banks world over,are much like weather watchers that analyse universal and endemic data /trends to assess forthcoming economic scenario . More than an open fisted rate cut announced by Governor RBI, on Tuesday, his indication of a favourable ' El Nino ' for the Indian economy would assist market sentiments. While he may cajole the monetary monsoons to be generous, the government has much work on its hands.The reservoirs are worryingly silted with NPA s to reduce effective capacity and the distribution canal network do not yet,reach marginal stakeholders in the economy. Though there was ample liquidity ,banks were hesitant to lend fretting over their balance sheets.This is likely to change with the RBI 's rosier projections on growth,although it trimmed GDP forecast from 7.6 to 7.4 %..Our markets are mature enough to factor in all this and its initial exuberance duly toned down before closing ,yesterday and the trend has persisted .