India can certainly achieve 7% plus growth rate says RBI’s New Governor Sanjay Malhotra
7 Feb 2025 10:56 PM IST
Reserve Bank of India’s (RBI) new governor Sanjay Malhotra on Friday said that India can achieve a 7 per cent plus growth rate and the country should aspire for it.
Reserve Bank of India’s (RBI). (Image: DC)
Mumbai: The Reserve Bank of India’s (RBI) new governor Sanjay Malhotra on Friday said that India can achieve a 7 per cent plus growth rate and the country should aspire for it. The six member central bank’s rate setting panel (Monetary Policy Committee) in its bi-monthly monetary policy has pegged India’s FY26 GDP growth at about 6.7 marginally higher than the earlier forecast of 6.6 percent announced in December 2024. The RBI expects economic growth in Q1, Q2, Q3 and Q4 of the next fiscal year starting April 1 at 6.7 per cent, 7 per cent, 6.5 per cent and 6.5 per cent respectively. The MPC has projected inflation at 4.2 per cent for FY26.
"I would like to stick my neck out and say that, certainly India can achieve a 7 per cent and plus growth rate. We should ce rtainly aspire for that," he told reporters at the monetary policy press conference.
“We are not immune to global risks. Financial stability could be challenged by factors beyond our control,” Malhotra warned, underscoring the delicate balance the RBI must strike between growth and inflation.
The Governor indicated his preference to revive growth under the flexible inflation targeting framework, paving the way for potential further rate cuts, economists said.
Malhotra also said that the Union Budget 2025-26 is 'excellent' from both growth as well as inflation point of view. Malhotra, a career bureaucrat who took over as the Governor of RBI in December, also said that the Rs 1 lakh crore of tax relief given to the middle class to spur consumption will not have any major impact on inflation.
Malhotra also said that the Union Budget 2025-26 is 'excellent' from both growth as well as inflation point of view. Malhotra, a career bureaucrat who took over as the Governor of RBI in December, also said that the Rs 1 lakh crore of tax relief given to the middle class to spur consumption will not have any major impact on inflation.
"Overall, it is an excellent budget both from a growth perspective as well as from an inflation perspective." He said the food items have 46 per cent weight in CPI. The Budget proposals focussing on agriculture will help increase production of pulses, oilseeds and others and help bring down food inflation.
He also said that the RBI is internally reviewing the economic capital framework, which dictates the upper limits on the surpluses that can be transferred to the government.
He also said that the RBI is internally reviewing the economic capital framework, which dictates the upper limits on the surpluses that can be transferred to the government.
The RBI cut the repo rate (the rate it lends to commercial banks) by 25 basis points to 6.25 per cent for the first time in nearly five years.
Speaking about the rupee volatility, Malhotra urged the public and market participants to look beyond daily fluctuations in the Indian rupee. He stressed that exchange rate movements are driven by global market forces, and one should not look at day to day volatility but look at long term movements.
( Source : Deccan Chronicle )
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