The Indian economy, with its macroeconomic stability, policy consistency, and a large and diversified demand and production base, is assured of a continuously improving economic trajectory, Reserve Bank of India Deputy Governor Poonam Gupta said on Tuesday, asserting that high, stable and accelerating growth has become the hallmark of India’s economic journey.

Delivering the 14th foundation day lecture at the Centre for Development Studies, Gupta said India’s growth over the past four-and-a-half decades reflects a pattern of steady acceleration without prolonged stagnation.

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“Economic growth has accelerated slowly but surely,” she said, noting that real GDP growth averaged 5.7% in the 1980s, rose to 5.8% in the 1990s, improved to 6.3% in the 2000s and 6.6% in the 2010s, and averaged 7.7% in the last four years, excluding the pandemic period.

The per capita income growth has been even stronger, aided by a sustained decline in population growth. From $274 in 1981, the per capita income increased to around $2,700 in 2024. “From 1981, it took about 23 years to double per capita income; in the subsequent two decades, it has increased almost fivefold,” she said.

Gupta said India’s growth acceleration stands out among emerging markets. A comparative analysis with seven major emerging economies shows no similar trend acceleration in that group, she noted.

A defining feature of India’s trajectory, she said, is the coexistence of rapid growth with macroeconomic stability. “Most macroeconomic indicators have remained in a healthy range over the last four decades, with notable improvement in recent years,” she said.

Poonam Gupta on FTAs

Inflation has moderated from near double digits in the 1990s to below 5% in recent years under the flexible inflation targeting framework. The current account deficit has remained moderate and has halved in recent years compared to the long-term average.

“It is expected that the recently announced India-USA trade deal, India-EU free trade agreement (FTA) and the newly signed or prospective new trade agreements will further strengthen the current account,” she said.

On the fiscal policy, Gupta said consolidation has resumed after the pandemic, anchored in the Fiscal Responsibility and Budget Management framework, with a sharper focus on capital expenditure. Public debt, though elevated, remains sustainable under standard metrics, aided by favourable growth-interest rate differentials, she said.