"Further action will be in the direction of the action (of a cut) that was initiated, and it will depend on the developments in particular on the fiscal front as well as continuation of the disinflationary process," Rajan told reporters at the customary post-policy interaction at RBI
headquarters.

He indicated that the quality of fiscal consolidation, rather than the headline deficit number alone, will be important for him while undertaking any further cuts.

"It is not that we are locked to a specific number or a specific path, but it is the overall package, whether it makes for serious, high quality fiscal consolidation over time that clearly will impact the inflationary forces that we are most worried about. We will be looking at all aspects of the Budget and they are eagerly awaited," Rajan said.

He said he is confident that the government is focused on delivering a "solid Budget", adding that Finance Minister Arun Jaitley and his team have publicly affirmed their commitment to the ambitious 4.1 per cent fiscal deficit target for the current fiscal.

Having shifted to accommodative stance by surprising everyone with an off-meeting rate cut on January 15, Rajan reiterated that the way ahead is only to cut rates, but said the RBI needs more data to be able to do so.

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