PremiumThe Reserve Bank of India (RBI) Governor Shaktikanta Das at the Hindustan Times Leadership Summit in New Delhi on Saturday shared his insights on the Indian economy saying that the domestic economy remains resilient and the central bank estimates India to grow by 7% this year.
"The banking sector is stable. The growth numbers are looking good in the current context. Our estimate is that India will this year grow by about 7%. IMF has projected that India will grow by about 6.8% in the current year. And that puts India among the fastest growing major economies in the world," Das said.
He said that the entire world has withstood triple shocks of Covid 19 pandemic, then the war in Ukraine, and now the financial market turmoil and the spillovers are felt by the emerging market economies like including India.
“The entire European Union is today at the brink of recession.. the United States is holding stable, other countries also witnessing growth has slowed down. However, so far as India is concerned, macroeconomic fundamentals, the financial sector stability, all these aspects will remain resilient," Das added.
On inflation, Governor said that it remains a matter of concern for which the central bank has increased the interest rates. He expects October inflation number to be less than 7%.
The law requires that when for three consecutive quarters, if the inflation remains above 6%, it will treated as a failure of monetary policy and the RBI is required to write a letter to the government.
"There's a reason why the inflation target has been kept at 4%. Internal committee of RBI did a detailed analysis and found that 4% inflation target with a price band of +-2%. RBI research at that point of time found, and even now it holds good, that inflation for India would be detrimental to growth."