Finally, it is done. Last week when the central bank Governor went for a higher-than-expected 50 bps cut, the move immediately invited praise from all quarters. There was a sense of euphoria all around. Industry experts hailed the move, with hopes that the rate cut would give a big boost to investment and consumption demand to prop up growth. It was also widely expected that the realty sector, which has strong linkages with the broader economy, would get a big push by the 'big bang' cut. Will these expectations actually come into reality?

In recent times, we have seen, more often than not, that commercial banks show reluctance to pass on the benefit to borrowers. They claim that their base rate is linked to cost of funds, which has not come down, and that is why they cannot transmit the policy rate cuts — an argument that had been severely criticized by the RBI governor recently. This time again, he urged the banks to pass on the benefits to lenders, but still I can't help but be skeptical, particularly after the State Bank of India's decision to cut rate on new home loans only by 20 basis points. I fear this move by the largest bank in the country will encourage other banks to follow a similar move.

However, I don't think rate cuts alone can change the economy in a big way. Lately, we have seen a slew of positive measures, including approvals to payment banks, credit drive under Mudra, black money amnesty scheme, new spectrum trading guidelines for telecom operators, efforts to fast-track development of highways, relief to foreign investors from controversial MAT, etc. but still there are a handful of growth challenges the economy is facing, such as poor rural demand, power sector woes, sluggish realty sector, poor monsoon effects, low capacity utilization, bank NPAs and declining exports. To address these challenges, the Centre must spell out an action agenda.

Meanwhile, India saw the highest FDI inflow for new projects in the first half of the calendar year 2015, attracting $31 billion in capex from foreign companies. Our PM is doing a great job in stirring up global investment interest in India. But as far as 'Make in India' is concerned, apart from FDI, it has not been able to push our manufacturing. The Centre should identify and prioritize clear goals, make assessment of resources to be required in short, medium and long terms, look for ways to access foreign technology through trade talks and set a goal-oriented action plan involving all major ministries and the states. The 'Make in India' programme needs a relook.