<h1>RBI's 2012-13 Q2 Review: Economic Challenges with Sluggish Growth, Persistent Inflation, and Need for Policy Calibration.</h1> The Reserve Bank of India's Second Quarter Review for 2012-13 highlights a challenging economic environment with sluggish growth and persistent inflation. The growth-inflation balance requires careful policy calibration as global economic conditions weaken, impacting India's export growth and business sentiments. The potential growth rate has declined, with manufacturing stagnation and mining contraction. Fiscal consolidation and infrastructure investment are crucial for growth revival. Despite improved balance of payments, the current account deficit remains concerning. Liquidity management has been active, but credit expansion is slow. Market reforms have improved sentiments, but inflation remains high, necessitating cautious policy measures.