2. Economic growth

According to RBI the momentum of activity in all sectors of the economy is yet to stabilize. "Agriculture should shed the effects of recent shocks and pick up in Q4 of 2014-15. Industrial activity will await improvement in the business environment and the resumption of consumption and investment demand before gaining sustained speed," RBI exclaimed.

RBI stated that the key to a turnaround in the growth path of the economy in the second half of the year is a revival in investment activity supported by fiscal consolidation, stronger export performance and sustained disinflation.

3. Liquidity

By reducing the SLR, the central bank has pumped in liquidity in the system. The chairman of the State Bank of India, the country’s largest, said that the move would help bring in 6,500 crore in the system for the bank.

RBI has also cut the ceiling on debt that must be held-to-maturity (HTM) by half a percentage point to 24 per cent. Bankers, however, had been expecting the RBI to align HTM to SLR rates.