Reserve Bank of India (RBI) Governor Shaktikanta Das has shared key steps needed to fulfill India's vision of becoming a "developed nation" by 2047. This goal, set by the government, coincides with the country's 100th year of independence and aims to propel India to the ranks of developed countries.
Governor Das emphasized that price stability is crucial for the economy, as it directly impacts consumer confidence and purchasing power. "When inflation is controlled, it strengthens the consumer's ability to buy goods," Das stated. He highlighted that unchecked inflation erodes this purchasing power, making price stability a key driver of economic growth.
In addition to consumer confidence, Das noted that keeping inflation in check is critical for attracting investors. Maintaining financial stability within banks and other institutions is equally essential for the country's sustained growth. "Today, we are seeing inflation gradually coming under control, though the 4 percent target remains a goal we are still working towards," Das explained.
He expressed optimism regarding India's growth trajectory, projecting a 7.2 percent growth rate for the current financial year. Despite global uncertainties, Das emphasized that India's economy remains stable and resilient.
In recent years, significant reforms have been implemented to strengthen the country's economic foundation. These include the establishment of a Monetary Policy framework, the Insolvency and Bankruptcy Code, and the Make in India initiative. However, Das stressed that further reforms are necessary, particularly in agriculture, marketing, supply chains, and labor sectors.
On the topic of agricultural development, Das highlighted the need to boost output in this sector, while also focusing on increasing merchandise exports. India's service sector is already making a strong impact on global markets, but the growth of merchandise exports remains a priority.
Regarding potential cuts to the policy rate, Das clarified that any decision would be based on future data, with inflation being the primary consideration. "A reduction in the policy rate will depend on our ability to manage inflation effectively," he said, emphasizing the importance of patience and the need for inflation to stabilize around the 4 percent target.
Das reassured that any adverse effects on economic growth due to not lowering the policy rate would be minimal, reaffirming the RBI's commitment to maintaining a balanced and stable economic environment.
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