RBI Governor Shaktikanta Das Predicts India's GDP Growth Nearing 8% For This Fiscal Year; Details Here

Reserve Bank of India (RBI) Governor Shaktikanta Das has hinted at the Indian economy's GDP growth nearing 8% for the current fiscal year ending in March. The announcement follows the country's impressive 8.4% economic expansion in the final quarter of 2023, marking its fastest pace in 18 months.

Das shared his insights during an interview with ET Now, expressing confidence in the upward trajectory of India's economic indicators. He revealed that the initial estimate of 5.9% growth in the fourth quarter could be surpassed, suggesting the full-year growth might exceed the government's revised projection of 7.6%.

"Our sense and understanding of the high-frequency indicators and the momentum of economic activity tell us that this 5.9% growth (expected) in Q4 could be exceeded, and when that happens, obviously, the (full year) growth will be more than 7.6%," Das stated. "And I think there is quite a good chance of the growth, GDP number for the current year, being very close to 8%."

The economic surge is attributed to robust performances in manufacturing and construction activities. The government, responding to the upbeat data, revised its growth estimate for the fiscal year 2024 from 7.3% to 7.6%, reflecting the nation's resilience and potential for sustained economic momentum.

Das pointed out that both rural and urban demand played pivotal roles in driving this growth. Rural demand, he noted, has significantly improved and is notably stronger than a year ago. Simultaneously, urban demand continues to display remarkable strength. The governor highlighted that investment activity remains robust, fueled by both government and private expenditure.

"Investment activity continues to be strong, driven by government capex and private capex also beginning to pick up, particularly in certain key sectors like steel, some sectors related to construction activity, textiles, chemicals. So private investment is also picking up," he explained.

Looking ahead, the RBI has projected a growth rate of 7% for the next fiscal year. Governor Das expressed optimism about the economic outlook for the upcoming year, emphasizing that achieving a 7% growth rate is very much within reach. However, he emphasized the need for vigilance and cautioned against complacency.

Despite the positive economic indicators, Das reiterated the RBI's commitment to its primary goal of maintaining financial stability and supporting economic activity. He acknowledged the persistent uncertainties, including geopolitical tensions and weather-related risks, and stressed the importance of remaining focused on bringing inflation down to the target of 4%.

"There is no room for complacency at all, and we need to remain focused and committed to our goal of maintaining financial stability and supporting economic activity in the country," Das emphasized.

India's economic resurgence presents a promising picture on the global stage, showcasing resilience and adaptability amid ongoing challenges. As the nation continues its upward trajectory, all eyes are on the RBI's approach to ensure a stable and sustainable economic recovery.