POLICY MEASURES

* ReporRate kept unchanged at 8%

* Reverse repo stays at 7%

* Cash reserve ratio stays at 4.5%

* Statutory liquidity ratio cut to 23% of deposits from 24%, effective August 11

POLICY STANCE

* Lowering policy rates now would only aggravate inflationary impulses without necessarily stimulating growth

* Primary focus of monetary policy remains controlling inflation

* Decline in non-food manufactured inflation not commensurate with growth moderation

* RBI says will respond to liquidity pressures, including by way of open market operations

FORECASTS

* Baseline GDP growth forecast for 2012-13 cut to 6.5% from 7.3%

* Baseline Wholesale Price Index inflation projection for March 2013 raised to 7% from 6.5%

INFLATION STANCE

* Conduct of monetary policy will continue to condition and contain perception of inflation in the range of 4-4.5%

* The challenge before the monetary policy committee is to maintain its priority of containing inflation and lowering inflation expectations

* Deficient and uneven monsoon performance so far will have an adverse impact on food inflation

* Going forward, further pressure on non-food manufactured products inflation cannot be ruled out

* Outlook for food and commodity prices, especially crude oil, has turned uncertain

* The reversal in crude oil prices in recent weeks may add to domestic inflationary pressure

* Input price pressures due to exchange rate movements and infrastructure bottlenecks in coal, minerals and power may push up non-food manufactured products inflation

* While growth has slowed down significantly, inflation remains well above the comfort zone

* Wage inflation in rural and urban areas remains relatively high

GROWTH, ECONOMY

* Large twin deficits pose significant risks to macroeconomic stability

* Risks of potentially large negative spillovers from the US and euro, have increased

* External risks to the outlook for the Indian economy are intensifying

* If the rainfall deficiency persists, agricultural production could be adversely impacted

* Need immediate action on fuel, fertiliser subsidies to meet the target of restricting the subsidy

* Data for industrial activity in Apr-May suggests that industrial production, despite some recovery, remains weak.

* M3 growth projection for 2012-13 has been retained at 15% and the growth in non-food credit of scheduled commercial banks at 17%.