RBI Governor Shaktikanta Das expressed confidence in the Indian economy’s ability to withstand global economic uncertainties, emphasizing its stability and resilience. Speaking at the launch of the Kochi International Foundation, he stated, “The Indian economy today reflects a picture of strength and stability.”
Economic Highlights
Das highlighted the robustness of India’s external sector, noting that the current account deficit (CAD) is under control at 1.1% of GDP, a significant improvement compared to the 6-7% range seen in 2010-2011. Additionally, India boasts one of the largest foreign exchange reserves globally, standing at approximately $675 billion.
While inflation rose to 6.2% in October from 5.5% in September due to food price pressures, Das reassured that it is expected to moderate. Referring to inflation metaphorically, he remarked, “Inflation is like an elephant in the room. Now, the elephant has gone out for a walk, and eventually, it will return to the forest.”
Strategic Monetary Policies
Das underscored the RBI’s strategic approach during global crises, such as the Ukraine war, which triggered inflation spikes. Unlike some countries, India avoided excessive money printing, a move he described as critical to preventing inflation from spiraling out of control.
He also credited the RBI’s decision to maintain interest rates at 4% during the pandemic, facilitating a smoother economic recovery. “What we avoided doing was just as important as what we did. Our balanced approach ensured inflation remained manageable while supporting growth,” he explained.
Transformational Reforms
Das highlighted the RBI’s efforts to revolutionize credit delivery, particularly for small entrepreneurs and farmers, through initiatives like the Unified Payments Interface (UPI) and the recently launched Unified Lending Interface (ULI). These innovations, he said, are driving inclusive growth and transforming financial access.
The governor concluded by emphasizing the RBI’s commitment to fostering economic stability while navigating global uncertainties with caution and foresight.
