FIBAC2024, Banking for ViksitBharat: RBI Governor Shaktikanta Das has underscored the necessity of addressing the final phase of disinflation to further reduce inflation and maintain the credibility of India's monetary policy. Speaking at a conference hosted by FICCI and IBA, Das emphasized that despite the progress made, the central bank must successfully navigate this last phase to ensure the effectiveness of its policy framework.

Das's comments suggest that the RBI may keep interest rates steady for a longer period than previously expected before considering any changes in its monetary policy. He had previously described inflation as a persistent issue, likening it to an "elephant in the room." Although this "elephant" has been temporarily subdued, Das emphasized that the RBI's aim is to ensure it is permanently removed from the economic landscape.

At the conference, Das highlighted the Indian economy's resilience, noting its macroeconomic and financial stability, along with a balanced growth-inflation outlook. He pointed to the recovery in rural demand and high levels of investor confidence as positive indicators. Furthermore, strong balance sheets among banks and corporates are contributing to the overall economic stability.

Das encouraged the private sector to capitalize on the current economic environment by increasing investments, particularly in manufacturing and infrastructure. He suggested that banks and financial institutions should offer tailored financial products and services for micro, small, and medium enterprises (MSMEs), including flexible credit options and improved access to working capital, to support their growth and job creation.

Looking ahead, Das expressed confidence in India's economic future, highlighting that structural factors such as infrastructure development, digital public infrastructure, and innovation are crucial drivers of the country’s long-term growth.

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