‘Would like to stick my neck out and say India can certainly achieve 7pc-plus growth’: RBI governor

MUMBAI: Reserve Bank of India (RBI) Governor Sanjay Malhotra on Friday said India can certainly achieve growth of 7 per cent or above and that should be what the country should aspire for.

“These are difficult questions to answer, but nevertheless, I would like to stick my neck out and say that certainly India can achieve 7 per cent plus growth rate, and we should certainly aspire for”, the RBI Governor said, when asked whether 7 per cent or above growth rate is achievable, at the post MPC press conference.

The government, in its Economic Survey, projected growth rate at 6.3-6.8 per cent for the upcoming fiscal – 2025-26. The RBI today projected 2025-26 growth at 6.7 per cent.

RBI Governor Sanjay Malhotra today announced the latest Monetary Policy in Mumbai. RBI Governor laid emphasis on inflation targeting framework, stating that it has ‘served economy very well’ and that the RBI will look at improving macro-economic outcomes ‘using flexibility… pic.twitter.com/DNU6uAoyZl

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Asked to respond whether growth more important or inflation, RBI Governor said in India’s case, the primary objective is to manage inflation and price stability, keeping in view the growth objective. “So we will continuously focus on that, trying to meet these objectives. We will try to align the inflation with the target that has been given to us”, he said.

At the same time, Malhotra said he felt that time has come where the RBI can be more supportive of growth, given inflation is coming down. “It (inflation) is expected to go down… We will maintain a neutral stance so that we are able to proactively respond to the evolving macroeconomic conditions”, he added.

To another question on whether the RBI would aspire to maintain in 2-6 per cent band or the ideal 4 per cent mark, the governor said, “In RBI, we like to be on top of everything”, hinting that its aim is to align inflation at 4 per cent.

On the inflation front, the central bank expects Consumer Price Index (CPI) inflation to ease to 4.8 per cent in 2024-25, with Q4 inflation projected at 4.4 per cent. For 2025-26, inflation is forecasted at 4.2 per cent, with quarterly estimates as Q1 at 4.5 per cent, Q2 at 4.0 per cent, Q3 at 3.8 per cent and Q4 at 4.2 per cent.

Announcing highlights from the recently held RBI’s Monetary Policy Committee decisions, Governor Malhotra earlier today said that the inflation has declined, supported by a favourable outlook on food prices and the continued transmission of past monetary policy actions. It is expected to further moderate in 2025-26, gradually aligning with the target.

Malhotra highlighted that food inflation pressures are expected to soften significantly with a favorable rabi crop, contributing to a stable inflation outlook. In his first Monetary Policy announcement since assuming the top post at RBI, they had unanimously decided to reduce the policy rate by 25 basis points (bps) from 6.5 per cent to 6.25 per cent, in first such move in about five years. (ANI)