Sceptics however will still argue that it is not interest cost which is holding back industrial growth in India but weak aggregate demand, in particular investment demand. Funds are available for the asking, and not just high-cost funds but even lower-cost funds available at internationally competitive rates. Yet there are no takers. Will the rate cut stimulate demand? At the margin, yes, but not by the required magnitude unless the finance minister does his bit to stimulate investment activity in the system. It is understandable that the RBI opted for a rate cut before the budget and did not wait for commentators and critics to exert pressure in this direction after the budget, as was the case over the last three years. The market expects another 50 basis points reduction in March or April. This may not come for some time if Mr Sinha's budget can do the trick. After all, there are compelling macroeconomic reasons, apart from the argument about what determines demand for funds, why the central bank shouldexercise caution. Inflation is clearly one such concern. For the near term, now that the RBI has done its job, we can only express the hope that banks and financial institutions will pass through the benefit of the rate cut to the market.