Over to corporate India

The Budget and the monetary policy have given growth a push; companies have to now step up to the plate

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Y FRONT-LOADING easing measures, including a surprise 50-basis point (bps) cut in the repo rate and a 100-bps cut in the cash reserve ratio (CRR), the Reserve Bank of India (RBI) is clearly hoping to speed up transmission by pushing banks to lower interest rates and to lend more. The cost of money needs to fall to revive both consumption and investment and also to ensure that the demand for credit sustains. So far much of the transmission has taken place in the money markets where rates at the shorter end have come down. Indeed, RBI Governor Sanjay Malhotra's observation that the transmission of previous cuts is not "perceptible" is not encouraging, though he did say that it has been faster than in the past. That is probably because liquidity in the system has been in surplus mode for some months now. The interest rate cuts have, however, been faster for fresh deposits than for loans. Moreover, loan growth has slowed sharply to around 9%, and lending to some sectors has even