‘Indian economy presents… ‘: RBI chief Shaktikanta Das’s big confidence in India’s growth story – Times of India

RBI Governor Shaktikanta Das emphasised India’s economic stability and strength, highlighting declining inflation and robust growth. He noted rising foreign exchange reserves, fiscal consolidation, and a resilient financial sector. The repo rate remains at 6.5%, with real GDP growth projected at 7.2% for 2024-25. Focus remains on inflation control and promoting growth.

NEW DELHI: Reserve Bank of India (RBI) Governor Shaktikanta Das in the tenth consecutive Monetary Policy Committee (MPC) meeting said that the Indian economy presents “a picture of stability and strength”.
“Today, the Indian economy presents a picture of stability and strength. The balance between inflation and growth is well-poised. India’s growth story remains intact. Inflation is on a declining path, although we still have a distance to cover.The external sector demonstrates the strength of the economy,” he said in a blog post on Wednesday.
Forex kitty reach new highs
He further continued that the foreign exchange reserves are reaching new levels and the government was making progress in reducing its fiscal deficit. Additionally, the financial sector continues to demonstrate strength and resilience.
“Forex reserves are scaling new peaks. Fiscal consolidation is underway. The financial sector remains sound and resilient. Global investor optimism in India’s prospects is perhaps at its highest ever. We are, however, not complacent, especially amidst rapidly evolving global conditions,” he said.
“We stand unambiguously committed to ensure durable alignment of inflation with the target, while supporting growth. In the prevailing macroeconomic conditions and the outlook, Mahatma Gandhi’s words remain highly relevant: “When the method is good, success is bound to come in the end.” he added.
Repo rate unchanged
RBI has maintained the repo, or short-term lending rate, at 6.5 percent since February 2023 and still remains unchanged, with industry analysts predicting any potential rate cut may happen in December.
The RBI’s Monetary Policy Committee (MPC), recently reconstituted by the government with three RBI officials and three newly appointed external members, voted five-to-one to maintain the benchmark repurchase (repo) rate at 6.5 percent for the 10th consecutive policy meeting. This rate influences the interest rates for home, auto, corporate, and other loans.
Focus on inflation
Das revealed that the real GDP growth for 2024-25 is projected at 7.2% with Q2 at 7%, Q3 at 7.4% ,and Q4 at 7.4% . The real GDP growth for Q1 of next financial year, that is 2025-26 is projected at 7.3%, but risks are evenly balanced.
RBI chief further said that the “Domestic growth has sustained its momentum with private consumption and investment growing in tandem. The resilient growth gives us the space to focus on inflation so as to enable its durable descent to the 4% target. In these circumstances, the MPC decided to remain watchful of the evolving outlook in the coming months, keeping in view the prevailing inflation and growth conditions and the outlook.”
“The global economy has remained resilient since the last meeting of the MPC in August, although downside risks from increasingly intense geopolitical conflicts, geo-economic fragmentation, financial market volatility and elevated public debt continue to play out, manufacturing is showing signs of slowdown while while services activity is holding up, world trade is exhibiting,” Das added.
The central bank announced an increase in UPI transaction limits, emphasising how UPI has “UPI has transformed India’s financial landscape by making digital payments accessible and inclusive through continuous innovation and adaptation,” he said.