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There is policy space to cushion any Omicron blow

Low vaccine coverage makes India's economy highly vulnerable to the emergence of the Omicron variant. The crumb of comfort is that there is policy space to soften some of the economic blow from a new outbreak. The fiscal position is healthier than usual for this time of year. Meanwhile, the RBI is likely to keep rates on hold in the MPC meeting next week and for a few more months beyond that.

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