OPINION: Renewed confidence.

from BUSINESS LINE, October 28, 2009 Confidence is clearly returning to industry, financial markets and the individual consumer as the domestic economy recovers. The spillover, in the form of climbing asset prices and rising inflationary expectations, can, however, thwart a holistic and sustained recovery from the worst crisis in living memory. Consequently, the central bank's policy review has sought balance in supporting growth and recovery while mitigating the risks of premature exuberance.

Downside risks to growth persist from various factors including impaired rural consumption after the poorest monsoon in close to four decades and languishing global demand. The central …