RBI Governor Shaktikanta Das has shown optimism over the growth of the economy in India and said that the estimate of the GDP growth rate is 7. Even for the more distant fiscal year 2024-25 the indicated 2% of the GDP seems quite reasonable and plausible.

Delivering a lecture at a financial conference in Mumbai, Das stressed that different segments of the Indian economy demonstrated their resistance and, while pointing to the stability of some key indicators, stressed that the trend was positive. This is however timely when global economics unsteadiness and questions about moderation of key economies are being discussed.

Investment progressed at a very robust high in the first quarter of the current fiscal year and that is according to Das one of the reasons for the confident outlook. Investment which constitutes roughly 35% of Indias GDP rose at a commendable 7 percent. of which was 5% in Q1 FY25, holding to its upswing in the recent quarter.

This steady accumulation of investments is attributed to the general economic growth and the creation of more jobs in the next quarters. According to RBI Governor, both public and private sectors are driving this trend where government funded infrastructure and capacities enhancement across different sectors has equally contributed prominently.

India’s services sector which contributes significantly to the country’s GDP has demonstrated stability and growth adding more strength to the economic expecting. Das mentioned that the industries involved were IT, the financial industry and travels have quickly recovered from the pandemic and some are even operating beyond the levels before the COVID-19 outbreak.

The Governor also noted that balance sheets of the banking sector are also strengthening as emanated by reduced non-performing assets (NPAs) which will augur well in credit risks and therefore the advancement of credits that boosts the economy.

The global risks such as geopolitical risk and those emanating from inflation in some economies have been acknowledged by Das but he is optimistic about India’s prospect in such a background. He mentioned that the fact that it has a huge domestic market, have a diversified economy and is still in the process of implementing structural economic adjustments makes India rather immune to external shocks to a large extent.

The measures taken by RBI with an active monetary policy and government’s fiscal measures were also mentioned as the factors that contributed to the stability of the economy as well as the growth.

But, as Das warned, this requires constant attention, and especially to such signs as inflation and financial position. He also reassured that despite the reassurance of the RBI, efforts to maintain price relative stability, let alone supporting economic growth, the centre endeavors to adopt a middle of the road monetary policy.

Speaking of future reforms the Governor also mentioned further improvements in the business environment, labor markets, and the financial sector for improving the country’s growth trajectory.

Several other economists and financial analysts have also supported the sentiment expressed by the RBI Governor with respect to India’s favourable growth prospects due to sustainable fundamentals and reform progress. Still, some analysts have drawn attention to the fact that in order to meet the 7. The government lately set a 2% Sang’s growth target which will further enhanced its efforts towards trying to solve structural challenges as well as increasing productivity in all sectors.

Since India is aspiring to be a global leader in the global economy, the coming months are critical to assess the ability of the country heading towards the path of growth amidst changing domestic and international circumstances.