Flood and drain.

"India's retail inflation eased to a six-year low of 2.10% in June, aided by an easing of food prices and favorable base effects, government data showed." "However, core inflation has ticked up." ET. "Core inflation tracks how prices are rising across the economy, leaving out food and energy, since the prices of those items tend to swing unpredictably." Investopedia. Since food and energy prices depend on supplies and are volatile, core inflation probably gives a more reliable indication of the direction of prices in the economy. But, our news media never give the figure for core inflation, preferring to clamor for cuts in interest rates based on the consumer price index (CPI) inflation. Whether our 'Godi' (lapdog) media  (wikipedia) has been so instructed is not known. "India's wholesale inflation contracted to 0.13% in June on an annual basis, marking the lowest recorded since October 2023, according to government data." ET. "Three separate reports have independently lamented the sharp fall in FDI (foreign direct investment)," as, since 2008, global FDI flows "as a share of global GDP declined from 5% in 2007 to below 1% during both 2023 and 2024, the lowest since the start of the century," wrote Rajrishi Singhal. "What makes India's FDI data remarkable, however, is the country's growing outflows," with "Indian businesses increasingly favoring overseas investments rather than putting their money to work at home." The Reserve Bank of India (RBI) cut its policy rate by 50 basis points to 5.5% in June. "RBI has cumulatively cut the repo rate by 100 basis points since its February policy review." TOI.  At the same time the RBI is to cut the Cash Reserve Ratio (CRR), which is the percentage of total deposits to be deposited with the RBI by commercial banks (BS), by 100 basis points from 4% to 3% in four tranches of 25 basis points between September and November (ET). All this was designed to flush banks with a flood of cash money to force them to lend at lower rates. But, Has it worked? "RBI will conduct a record Rs 2.5 trillion variable rate reverse repo (VRRR) auction...as it seeks to absorb a persistent glut of liquidity in the banking system. This move follows a series of recent VRRR operations that have drained Rs 3 trillion," and yet, "By some estimates, the system is now awash with close to Rs 9 trillion in excess funds, drawing parallels with the quantitative easing seen in developed economies after the global financial crisis." TOI. Why this seemingly rash excess when "India became the 4th largest global economy in 2025," and "is the world's fastest-growing major economy, with real GDP growing at 6.5% and nominal GDP tripling from Rs 106.57 trillion (2014-15) to Rs 331.03 trillion (2024-25). pib.giv.in. These numbers would be considered blistering growth by other countries. Given such a rosy outlook, the RBI's frantic efforts at stimulating economic growth seems inexplicable. Flood with money and then drain it. Seems kind of futile. Foolish even.