Growth prospect: Reserve Bank of India (RBI) Governor Shaktikanta Das, in the Monetary Policy (MPC) Meeting on April 19, underlined the resilience of the Indian economy, noting an average annual growth rate of 8 per cent over the past three years. 

India maintains its position as the fastest-growing major economy globally, propelled by a resurgence in investment and manufacturing activity, alongside sustained growth in the services sector.

Das said, “Looking ahead, the baseline projections show inflation moderating to 4.5 per cent in 2024-25 from 5.4 per cent in 2023-24 and 6.7 per cent in 2022-23. This success in the disinflation process should not distract us from the vulnerability of the inflation trajectory to the frequent incidences of supply-side shocks, especially to food inflation due to adverse weather events and other factors.” 

Governor Das addressed the inflationary landscape, reporting a moderation in Consumer Price Index (CPI) headline inflation to 5.1 per cent during January-February 2024, down from December 2023's elevated level of 5.7 per cent. The sustained softening in CPI core inflation, excluding food and fuel, by 180 basis points since June 2023, has been a key driver of the disinflation process. However, volatile and elevated food inflation poses challenges to this trend.

Amid these inflation dynamics, Governor Das expressed confidence in the Indian economy's growth prospects for 2024-25. Expectations of a normal southwest monsoon bode well for the agricultural sector and rural demand while rising consumer confidence and optimism in employment and income are anticipated to drive private consumption. 

Additionally, upbeat business outlooks, healthy corporate and bank balance sheets, and a resurgence in private capital expenditure signal further momentum in domestic investment activity, supported by improving global growth and trade prospects.

Governor Das reaffirmed the RBI's commitment to maintaining policy continuity, focusing on preserving the gains achieved in disinflation over the past two years. With inflation expectations of households becoming more anchored, he advocated for an unwavering focus on price stability to align headline inflation with the 4 per cent target on a sustainable basis. 

Against the backdrop of strong growth momentum, Governor Das endorsed keeping the policy repo rate unchanged and maintaining the focus on withdrawing accommodation.