..with so many idle hands on deck, exemplified not just by mid senior unemployment but also by a cash reserve of INR 4.7 Tln as studied by ET and a 200% rise over 2010 there is a lot of going back on the threatening tones adopted with RBI last month. With inflation at 10% levels consistently, the longer yields have already responded, and with monetary easing in fashipon inculcated by the US Fed, the market is likely to take a steep hike in yields on the long end till the effects of the easing are finally dispersed and interest rates clampdown can have an effect.

If you see other nations reducing rates, Brazil is the example which should be valid only as it has too high a watermark even at the current 11.5% and at le ast 2 rate hikes are required before it reaches the levels envisaged by india at the peak ,. I would stoutly defend RBI till our rates reach 9.5% to 10% as inflation refuses to climb down and expect many more to defend RBI hikes int he coming weeks. 

Also, maruti and Reliance performance could be used as an example of how things have gone wrong with India inc and at that time, easing rates may not be good policy for us just to be in line with Brazil , Turkey and indonesia. Israel's behaviour is always more in line with developed market estimates and growth is a challenge where Indonesia is just trying to blind side investors and policymakers alike with its eagerness to follow first into rate cuts. Neither china nor India should respond to these measures or even treat these as pressure as interest rates in Indonesia (6.75%) or Turkey. Turkey did get a positive response from reduction of rates around the 6% level itself but one must understand its response wis likely 5 times that in India given its nearness to Frontier markets or its newness in FDI regimes and the geo political overhaul committed there in the last one year and India cannot really follow into that policy regardless of the heartburn it has caused to Walmart or Starbucks and other remaining FDI candidates unable to enter indian markets in the middle of the festive season

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