In a moment of candour laced with humour, Reserve Bank of India (RBI) Governor Sanjay Malhotra said, “I’m Sanjay, but I’m not the Sanjay of Mahabharata,” when asked about the future trajectory of India’s key lending rate.
His remark came in response to questions regarding whether more repo rate cuts are expected, following the RBI’s decision to reduce the rate by 25 basis points on April 9.
The reference to the Mahabharata's Sanjay – the charioteer granted divine vision to narrate the events of the Kurukshetra war to the blind King Dhritarashtra – was intended to highlight the inherent uncertainty in predicting economic outcomes, particularly at a time when the global economic environment remains highly volatile.
Governor Malhotra was speaking during a media briefing after the Monetary Policy Committee (MPC) meeting, where the decision to reduce the repo rate to 6 per cent was formally announced. This marks the second consecutive cut under Malhotra’s leadership since he took charge of the RBI in February.
Amid growing global unease due to the tariff measures announced by United States President Donald Trump, the RBI has taken a cautious stance. The central bank has revised India’s GDP growth projection for 2025–26 down to 6.5 per cent, a 20 basis point cut.
Malhotra noted that while the full impact of US tariffs on India’s economy is still unfolding, there are already visible signs of weakening global demand which could dampen growth further.
He emphasised that although inflation could be influenced both positively and negatively by global developments, the greater concern presently lies with growth.
“Inflation may actually moderate if demand shrinks globally due to the tariff war,” he explained. “However, the uncertainty makes it difficult to draw conclusions at this point.”
Addressing the broader coordination between fiscal and monetary policies, Malhotra said both arms of the economy were working in tandem. “The government has taken several supportive measures in the Budget – including tax rebates and increased capital expenditure. From our side, we have lowered the repo rate and signalled a change in stance towards further easing,” he added.
Still, the Governor reiterated that no one can predict the precise bottom of the rate cycle. “Where the rate will go from here, we really don’t know. I’m not the Sanjay of Mahabharata to see into the future,” he remarked again with a smile.
Despite these uncertainties, Malhotra expressed cautious optimism that coordinated efforts by the RBI and the government would help navigate the current economic challenges.
He indicated that future policy moves would remain data-dependent, shaped by domestic factors and developments on the global stage.
The rate cut, along with the central bank’s dovish outlook, is largely seen as a response to the external risks stemming from the escalating tariff tensions and their possible impact on global and domestic demand.
The RBI’s position reflects a growing recognition that in a globally connected economy, India cannot remain immune to turbulence beyond its borders.
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