RBI Governor Shaktikanta Das on Thursday affirmed that India’s growth trajectory remains strong, driven by key economic factors gaining momentum.
Speaking at the inaugural session of FIBAC 2024, Das noted that the Indian economy is at a pivotal moment, experiencing significant changes across various sectors and poised for substantial shifts.
“Our nation’s progress toward becoming an advanced economy is supported by a unique blend of factors: a young and dynamic population, a resilient and diverse economy, a robust democracy, and a rich tradition of entrepreneurship and innovation,” Das said.
He highlighted that the Indian economy had a strong recovery from the COVID-19 downturn, growing at an average annual rate of 8.3% over the past three years. For the current financial year, the Reserve Bank of India (RBI) projects a growth rate of 7.2%. The International Monetary Fund (IMF) has also revised its forecast to 7%, while the World Bank has projected a 7% growth for fiscal year 2024-2025.
“As one can see, all the projections of the international agencies and our projections are converging,” the Governor said.
The National Statistical Office (NSO) estimated GDP growth at 6.7% in the first quarter of this year.
“Data shows that the fundamental growth drivers of the economy are gaining momentum. This gives us the confidence to say that the Indian growth story remains intact,” Das said.
Private consumption, which constitutes 56% of GDP, has rebounded to 7.4% growth in the first quarter of this year from 4% in the second half of 2023-24, indicating a revival in rural demand, according to Das.
Investment, another key growth driver, represents 36% of GDP and is growing at 7.5%, maintaining its momentum. Das noted that over 90%, combining private consumption and investment, of GDP is expanding at a robust pace.
From the supply side, while agriculture grew modestly at 2% in the first quarter, it is likely to perform better in the remaining months of the current year on the back of good progress of monsoon, good sowing of kharif crops, and good moisture condition for the next rabi crops. Industry and services recorded a growth of 7.4% and 7.7% respectively, he said.