The Reserve Bank of India‘s Monetary Policy Committee (MPC) member Shashanka Bhide has expressed confidence in the country’s ability to sustain a robust growth rate of 7% in the current fiscal year and beyond.
Bhide attributes this optimistic outlook to a confluence of factors, including favorable monsoons, high agricultural productivity, and an improving global trade environment. These conditions, coupled with India’s impressive performance in manufacturing and infrastructure sectors during the previous financial year, have propelled economic growth close to 8%.
‘With conducive conditions on multiple fronts, India is well-positioned to maintain a 7% growth trajectory not just in 2024-25 but also in the subsequent years,’ Bhide stated.
His remarks resonate with the upward revision of India’s growth forecasts by leading international agencies. The International Monetary Fund (IMF) has raised its 2024 GDP growth projection for India to 6.8%, citing robust domestic demand and a growing working-age population. Similarly, the Asian Development Bank (ADB) has pegged India’s GDP expansion at 7% for the current fiscal year.
However, Bhide cautioned that global economic uncertainties could pose challenges. ‘The pace of recovery in global demand remains sluggish, and persistent supply chain disruptions could upset the demand-supply balance, risking inflationary pressures,’ he warned.
Furthermore, Bhide emphasized the need to prepare for potential impacts of natural calamities like floods or droughts, which historically have affected agricultural output. ‘We must be prepared to mitigate such shocks to ensure sustained economic growth,’ he added.
Earlier statements from RBI Governor Shaktikanta Das reaffirmed India’s status as the fastest-growing major economy globally, driven by an upturn in the investment cycle and revival in manufacturing. The services sector also continues to grow at a robust pace.
India’s resilience is underscored by the International Monetary Fund’s latest World Economic Outlook, which forecasts India to remain the fastest-growing among major economies in 2024.
