Subbarao overruled contrary advice on rate cut
Consensus among members at April policy meet that rupee be allowed to depreciate
BS Reporter / Mumbai May 15, 2012

[I had mentioned this long back, infact the day the RBI went ahead and cut the Interest rate. You can read my earlier posts to find, exactly what I had written at that time--that was from my close sources. It was the governors discretion which cut the repo rate, by 50 bps, which I appreciated. The governor had done the right thing.....and I would love to see more rate cuts in the coming days to lift the sagging Indian economy and especially steps to boost the infrastructure sector, which is in shambles. The price of vegetables did not rise, due to rate cut only, but more due to inherent shortages of supply. Will the people stop eating vegetables, if the price rises? This is ridiculous!! What the government needs to do is to relax import restrictions on the items where, inflation is persisting. In this way, fall in the rupee could be also be arrested to some extent]

Governor D Subbarao went ahead to reverse the Reserve Bank of India’s (RBI) policy stance in the April review, despite a majority of the external members on its monetary policy committee suggesting only a pause.
After raising policy rates 13 times between March 2010 and October 2012, the central bank maintained status quo in the next three policy meetings. Then, in April, it had reduced the key repo rate (at which it lends money to banks) for the first time in these three years, by 50 basis points (bps) to eight per cent, to boost sluggish growth.
RBI has released the minutes of the April 11 meeting of its Technical Advisory Committee on monetary policy. The meeting, chaired by Subbarao, was attended by the four deputy governors. The six external members (five attended) are—Shankar Acharya, Rakesh Mohan, Indira Rajaraman, Sudipto Mundle, Errol D'Souza and Ashima Goyal.