India’s growth story remains intact as its fundamental drivers – consumption and investment demand – are gathering momentum, RBI Governor Shaktikanta Das has asserted, adding that the country is likely to post real GDP growth of 7.2 per cent for FY2024-25. Mumbai, Oct 23: India’s growth story remains intact as its fundamental drivers – consumption and investment demand – are gathering momentum, RBI Governor Shaktikanta Das has asserted, adding that the country is likely to post real GDP growth of 7.2 per cent for FY2024-25. Prospects for private consumption, which is the mainstay of aggregate demand, look bright, driven by improved agricultural scenario and rural demand. A sustained surge in services will also support urban demand. Government expenditure of the Centre and states is expected to gain pace in line with budget estimates,”
Das said in the RBI’s monthly bulletin. “Investment activity will benefit from consumer and business optimism, the government’s continued emphasis on capital expenditure, and healthy balance sheets of banks and corporates,” he said. Taking all these factors into account, real GDP growth for 2024-25 is projected at 7.2 per cent, with the second quarter at 7.0 per cent, the third quarter at 7.4 per cent and the fourth quarter at 7.4 per cent. Real GDP growth for the first quarter of 2025-26 is projected at 7.3 per cent, according to the RBI document. Meanwhile, CPI inflation for 2024-25 is projected at 4.5 per cent, with the second quarter at 4.1 per cent, the third quarter at 4.8 per cent and the fourth quarter at 4.2 per cent. CPI inflation for the first quarter of 2025-26 is projected at 4.3 per cent.
“The CPI print for the month of September will see a large jump due to unfavourable base effects and a pick-up in food prices, which is due to the impact of reduced production of onion, potato and chana dal (gram) in 2023-24,” Das said. The RBI governor further said domestic growth has maintained its momentum, with private consumption and investment picking up. “Resilient growth gives us space to focus on inflation to ensure its durable decline towards the target of 4 per cent. Taking into account the current inflation and growth situation and outlook, the MPC considered it appropriate to change the stance to ‘neutral’ and to explicitly focus on durable alignment of inflation with the target while supporting growth,” he said. Going forward, the Reserve Bank will continue to remain agile and flexible in its liquidity management operations.