Speaking during a CII session at the World Economic Forum Annual Meeting on 'High growth, low risk: The India story, Shaktikanta Das drew attention to the reassuring recent global economic indicators, noting a decrease in inflation even though overall growth rates remain subdued.
RBI Governor Shaktikanta Das expressed optimism about the Indian economy, anticipating a robust growth rate of 7% in the upcoming fiscal year. He highlighted the likelihood of a further decline in inflation and credited the government for the impactful structural reforms undertaken in recent years.
Das emphasized that these reforms have significantly bolstered the medium and long-term growth prospects of the Indian economy. Despite acknowledging the challenging global macroeconomic environment, Das highlighted India as a beacon of growth and stability.
Q: You mentioned a growth projection of 7% for 2024-25. What factors contribute to this optimistic outlook, and what challenges do you anticipate in achieving this target?
A: The projection for 2024-25 reflects our confidence in the Indian economy's potential for sustained higher growth. We have a significant demographic advantage, with around 60% of the population soon expected to be of working age.
While challenges may arise, we are committed to ongoing structural reforms and price stability, which are crucial in achieving and sustaining this growth trajectory.
Q: Could you elaborate on the factors contributing to this projected growth, especially given the challenging global macroeconomic environment?
A: Despite the challenges, India's strong domestic demand remains a key driver of growth. The country's resilience in the face of recent global shocks is evident, and we are confident that the external balance is comfortably manageable, thanks to robust foreign exchange reserves.
Q: You mentioned falling inflation and a positive market response. How do these indicators align with your growth projections, and what role do recent structural reforms play in this scenario?
A: Recent global economic indicators have been reassuring, with falling inflation and a positive market response. The credit for this positive momentum goes to the government's structural reforms, which have played a crucial role in addressing challenges and supporting the overall economic landscape.
Q: In terms of inflation, you emphasized achieving the government's target of 4%. Can you share more details on how you plan to navigate this path, considering the global economic uncertainties?
A: Core inflation has steadily moderated, and proactive supply-side interventions by the government have been instrumental in addressing food price shocks.
We remain committed to achieving the government's retail inflation target of 4%, with an allowable margin of 2% on either side. Looking ahead, we expect average Consumer Price Index (CPI) inflation to be 4.5% next year.
Q: You mentioned supply chain disruptions and persistent geopolitical flashpoints. How does India plan to address these issues?
A: Yes, indeed. Geopolitical uncertainties and supply chain disruptions continue to pose challenges.
India recognizes the importance of adapting to these changing dynamics. We are closely monitoring the situation and working towards normalization in supply chains. Our focus remains on bolstering our resilience to external shocks.
Q:In a recent interview with Reuters, you highlighted the government's commitment to fiscal consolidation and structural reforms. Can you elaborate on the specific measures being taken to achieve these goals?
A: Fiscal consolidation is a priority for the government, and we remain committed to it.
We anticipate a continued focus on structural reforms to enhance the overall economic framework. The government is actively working on policy measures to strengthen key sectors and foster sustainable growth.
Q:Amid these challenges, how would you describe the current state of the Indian economy?
A: The Indian economy is robust and stable, both on the macro-economic and financial sector fronts. We have emerged stronger from recent crises, showcasing the resilience of our economy. The emphasis on maintaining stability has been a cornerstone of our strategy.
Q: During the World Economic Forum, how has India been portrayed, and what is your message to the global community regarding India's economic outlook?
A: Throughout the World Economic Forum, I actively engaged in various speaking engagements to reinforce India's positive economic outlook.
The message is clear: India is resilient, adaptable, and well-prepared to face global challenges. We invite the global community to recognize the strength of the Indian economy and explore opportunities for collaboration and growth.
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