Based on the article provided, here are the key elements :

• Alignment on Boosting Growth: Both the Reserve Bank of India (RBI) and the government are now aligned on boosting economic growth.
• RBI’s Monetary Policy Decisions:
  • Repo Rate Cut: The RBI’s Monetary Policy Committee (MPC) made a major decision to cut the repo rate by 50 basis points to 5.5%. This follows previous cuts of 25 basis points each in February and April.
  • Cash Reserve Ratio (CRR) Cut: A second major decision was the slashing of the cash reserve ratio by 100 basis points. This helps ensure banks have funds to lend out at lower rates, making it cheaper for companies and consumers to borrow.
  • Shift in Stance: The central bank has changed its stance from being neutral to being accommodative, indicating a move back to natural rates, meaning more rate cuts are likely unless growth fails or unexpected events occur.
  • Growth Outlook: The RBI is projecting growth in the current financial year 2025-26 to be 6.5%, which is faster than what the government provisionally estimated for the previous year.
• Rationale for Rate Cuts:
  • Boosting Growth: The primary reason for the rate cuts is to vocally choose growth in the perennial growth-inflation trade-off.
  • Inflation Under Control: Inflation is low and not expected to jump any time soon, with no major election fears remaining that would otherwise necessitate a pre-emptive strong grip on price levels.
  • Stimulating Lending: Lower rates are expected to make it cheaper for companies and consumers to borrow and invest/purchase, thereby boosting growth.
  • Addressing Global Uncertainties: The Indian economy and global economies are facing uncertainties, and the neutral stance allows the RBI to be prepared for an unforeseen and sustained spike in prices or monsoon issues.
• Government’s Fiscal Policy:
  • Stimulus Limit Reached: Fiscal policy has reached the limit of the stimulus it can provide.
  • Capital Expenditure: Government capital expenditure can at best be maintained at the current level and cannot reasonably be expected to grow much further.
  • Increased Defence Spending: The government now has additional defence spending to account for.
  • Finance Minister’s View: Finance Minister Nirmala Sitharaman and officials in the Ministry of Finance have indicated much support for these economic measures.
• Overall Strategy: Both monetary policy (RBI) and fiscal policy (government) are working together to step up and boost growth.