RBI Annual Report: India GDP Jumps To 7.6%, Annual UPI Payments Cross 200 Billion
The Reserve Bank of India’s annual report reveals that India remains the world's fastest-growing major economy, posting a 7.6% GDP expansion fueled by manufacturing and domestic demand. While headline inflation dropped to 2.1% due to lower food prices, households faced higher cooking gas costs. Meanwhile, annual UPI transactions surged past 200 billion. Looking ahead, the RBI has paused rate cuts, maintaining a 5.25% repo rate due to rising West Asia conflicts and weather risks.
- Republic Business
- 2 min read
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India maintained its position as the world's fastest-growing major economy, defying global financial pressures to post a robust GDP expansion of 7.6%.
The Reserve Bank of India’s latest annual report highlights a resilient domestic market. Strong consumer spending and active corporate investments shielded the country from high global interest rates and trade uncertainties.
Manufacturing
The domestic industrial sector emerged as a primary growth driver. Manufacturing activity surged by 11.5%, aided by steady corporate credit flow and government incentive programs.
In contrast, agricultural growth slowed to 2.4% after erratic weather disrupted early summer crops. However, a strong winter harvest helped the rural sector recover significant ground late in the fiscal year.
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Food Prices Drop, Gas Costs Rise
Indian households experienced mixed financial pressures as headline inflation fell sharply to 2.1% from 4.6% the previous year. The drop was largely driven by a significant decline in grocery and food costs.
However, retail budgets faced pressure from other segments. Cooking gas expenses rose following a ₹50 and ₹60 hike per LPG cylinder, while global price surges in gold and silver kept core retail costs elevated.
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Banking Health
With retail inflation under control for most of the year, the central bank reduced its benchmark repo rate by 100 basis points to support economic momentum.
This rate-cutting cycle occurred alongside a significant improvement in institutional financial health. Gross non-performing assets across commercial banks dropped to a multi-decadal low, while overall bank credit grew by 15.9% year-on-year.
UPI Reaches 200 Billion Milestone
India's digital payments infrastructure continued its rapid expansion. Total UPI transaction volumes grew by 30%, officially crossing the milestone of 200 billion transactions within a single year.
To manage the massive scale of digital transactions, the RBI deployed new security measures. The central bank introduced real-time artificial intelligence tools to target online banking fraud and expanded its programmable digital rupee trials to streamline government welfare delivery.
RBI Shifts Focus to Global Risks
Despite the positive fiscal year indicators, the central bank warns that external challenges are intensifying.
Escalating conflicts in West Asia, higher global shipping fees, and shifting weather patterns have prompted the RBI to project a higher inflation target of 4.6% for the upcoming year. Concurrently, GDP growth is expected to moderate slightly to 6.9%.
In response to these incoming economic risks, the central bank has halted its monetary easing cycle, holding the benchmark repo rate steady at 5.25%.
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