Policy continuity & stability, thrust on infrastructure, digitalisation to push India’s growth trajectory: RBI Governor

Expressing an optimism over India’s growth prospects, the Reserve Bank of India (RBI) Governor Sanjay Mahlhotra has said that policy continuity and stability, financial stability, fiscal prudence and efficiency, thrust on infrastructure, renewed focus on manufacturing, demographic dividend, innovation, continued focus on Ease of Doing Business and reforms, digitalisation are among factors that will push India’s growth trajectory over the medium to long-term. He said that the Indian economy has demonstrated remarkable resilience and dynamism. Over the past four years (2021-22 to 2024-25), it has recorded an average annual growth rate of 8.2 per cent.

The central bank chief noted that ‘It was and continues to be the fastest-growing major economy in the world’. He added ‘This is a significant step up from the average growth rate of 6.6 per cent in the preceding decade (2010 to 2019).’ He supplemented ‘Even this year, our growth is expected to remain robust at 6.5 per cent. This is despite the tremendous increase in uncertainty and volatility in global financial markets. While this rate is lower than in recent years and falls short of India’s aspirations, it remains broadly in line with past trends and the highest among major economies’.

Over the last ten years, India has leapfrogged from the tenth-largest economy to the fifth-largest. India is poised to become the third-largest economy shortly. Citing research that shows political and policy stability is a prerequisite for long-term investment planning to fuel growth in any economy, the RBI Governor said India’s vibrant democracy has ensured the same over the decades. Explaining India’s financial stability, he said the country’s financial sector is strong and vibrant, efficiently catering to the funding requirements of various economic agents. The Indian capital markets - equity and debt - have increasingly deepened, providing avenues for market-based funding to businesses. India’s capital markets have witnessed record participation from retail and institutional investors, channelising savings into productive investments. 

Elaborating on fiscal prudence and efficiency, he said India continues to demonstrate fiscal prudence to foster faster and inclusive growth. On the manufacturing front, he stated that India is focused on achieving self-reliance in manufacturing. Furthermore, when discussing digitalisation, he placed particular emphasis on UPI’s growth. In conclusion, he stated that India continues to be an economy supported by stability - both monetary, financial, and political; policy consistency and certainty; a congenial business environment; and strong macroeconomic fundamentals. He added at a time when many advanced economies are facing economic headwinds and a deteriorating economic outlook, India continues to offer strong growth and stability, making it a natural choice for investors seeking long-term value and opportunity.