Over 7% GDP in FY25: India’s economic activity has sustained its strong momentum with both urban and rural demand supporting growth, said RBI Governor, Shaktikanta Das . The central bank chief said a strong thrust by the government on capital expenditure coupled with signs of pick up in private investment and healthy aggregate demand conditions, are expected to lift the real GDP growth to 7 per cent in the next fiscal year of 2024-25. With this, India would see over 7 per cent growth rate for four consecutive years. 

Das was speaking during a CII session on “High Growth, Low Risk: The India Story” at Davos in Switzerland. The RBI governor underscored that amid a challenging global macroeconomic environment, India presents a picture of growth and stability.

Highlighting the reasons behind India’s emergence as the beacon of growth, Shaktikanta Das, stated that the decisive and timely monetary policy actions of the Reserve Bank of India through appropriate policy actions and liquidity measures have helped India to achieve a quick and sustained recovery. “These actions have been supplemented by structural reforms in the areas of taxation, banking, ease of doing business, boosting physical & digital infrastructure announced by the government in the last few years, which together have boosted the medium- and long-term growth prospects of Indian economy” Das said. 

Inflationary measures  

On inflation, RBI Governor highlighted that the sharp moderation seen in core inflation (ex-food & fuel) in the recent months has shown the efficacy of the monetary tightening measures of the RBI and liquidity rebalancing measures. He reiterated that the future monetary policy actions of the Central Bank will steer the economy towards the 4 per cent inflation target on a durable basis given the fact that a stable inflation regime region provides a bedrock to India’s growth ambitions. For the next fiscal year FY25, RBI expects the CPI inflation to average 4.5 per cent, he added.

Commenting on the global headwinds, Das noted that the recent heightened uncertainty has resulted in emerging market (EM) economies being at the receiving end of excessive volatility in US dollar and the bond yields. “In such a situation, the EM economies which have their own domestic challenges cannot be held hostage to international financial cycles. EM economies have to act to safeguard their own interests. Accordingly, the multilateral institutions could do well to take a more nuanced and balanced view of policy perspective of the EM economies”, he added.