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India's central bank leans closer to Modi with extra dividend

New governor stakes out a middle ground, not irrationality, analysts say

Shaktikanta Das, the new Reserve Bank of India governor, is trying to find a middle ground, analysts say.   © Reuters

MUMBAI -- The Reserve Bank of India's decisions to pay an interim dividend to the government and cut its policy rate herald the beginning of an era, one in which the institution acts more pragmatically and in harmony with government policy, economists and analysts say.

Experts believe the decisions by Shaktikanta Das, the bank's new governor, were made to support growth and boost fiscal spending ahead of elections in May, in which the government of Prime Minister Narendra Modi will seek a second term.

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