In a surprising yet assertive move, the Reserve Bank of India recently slashed its key interest rate by a margin not seen in the past five years. The decision signals a strong push to boost economic momentum amid weakening demand and rising global uncertainty. Cheaper borrowing is expected to fuel consumption, energize investment, and give industries a much-needed lifeline. But as the dust settles, an important question looms large, at what cost does this growth come?

A bold rate cut often reflects more than optimism; it hints at concern. While lower rates may encourage spending, they also risk stoking inflation, especially in a country where fuel and food prices remain volatile. Additionally, if liquidity floods the system without productive investment avenues, it can create asset bubbles or deepen inequalities. Critics argue that structural reforms are not just monetary policy but what the economy truly needs. In the short run, the RBI’s move may provide a boost. But whether it lays a strong foundation or just a temporary fix depends on how businesses, banks, and the government respond next. Growth is essential but not if it compromises long-term financial stability.

RBI’s boldest rate cut in half a decade: growth at what cost?