A 1-minute snapshot of RBI's credit policy statement

* Global financial markets have also been volatile due to changing perceptions of monetary policies in the advanced economies.

* Domestic economic activity remains moderate in Q1 of 2015-16.

* An estimated 94 lakh hectares of area sown under the rabi crop was adversely affected by unseasonal rains and hailstorms in March.

* Outlook for Kharif season clouded by India Meteorological Department’s forecast of below average monsoon, and by the confirmation of onset of El Nino by the Australian weather department.

* Damage to crops like pulses and oilseeds – where buffer foodstocks are not available in the central pool – pose an upside risk to food inflation.

* Government’s contingency plans for food management crucial to limit impact of low production on inflation. Also, increase in agricultural support prices need to be limited.

* Industrial production recovering, albeit unevenly. Sustained weakness in consumption spending, especially in rural areas, continues to be a drag. Corporate sales have contracted.

* Upturn in capital goods production underway; unclogging of stalled investment projects, fresh capex by private firms key to the trend sustaining.

* Sustained revival of coal output augurs well for electricity generation and mining. There is some optimism on gas pricing and availability.

* Power purchase processes need to be expedited and power distribution companies’ financial stress addressed on a priority basis

* Some public sector banks will need more capital to clean up their balance sheets and support lending as investment revives.

* Leading indicators of services sector activity emitting mixed signals.Slowdown in tourist arrivals, railway traffic and international air passenger and freight traffic could affect hotels, restaurants and transport firms.

* Vegetables inflation continues to ease, along with that in cereals, oil, sugar and spices. Prices of protein items, especially milk and pulses, continue to rise.

* Rural wage growth, although still moderate, picked up. Inflation expectations remain in high single digits.

* Current account deficit is expected to be contained to about 1.5 per cent of GDP this year

* Net exports unlikely to contribute as much to growth going forward as they did in the past financial year. Therefore, growth to depend more on a strengthening of domestic demand.

* Foreign exchange reserves of around US$ 350 billion, provide a strong second line of defence to good macroeconomic policies if external markets turn significantly volatile.

* Assuming reasonable food management, inflation expected to be pulled down by base effects till August but to start rising thereafter to about 6.0 per cent by January 2016.

* Weak monsoon, rising crude, volatility in global environment, pose upside risks to inflation