The Reserve Bank of India (RBI) Governor Shaktikanta Das on Thursday announced the first Monetary Policy Committee (MPC) deliberation post the Union Budget 2024.
MPC held its third bi-monthly policy meeting for the Financial Year 2025 from August 6 to August 8.
The MPC with a majority of 4:2 members decided to keep the policy rate unchanged at 6.5%. Members also decided to maintain its ‘Withdrawal of Accommodation” stance.
Members decided to remain focussed on withdrawal of accommodation to ensure inflation progressively aligns to the target while supporting growth.
“Consequently, the standing deposit facility (SDF) rate remains at 6.25%, and the marginal standing facility (MSF) rate and the bank rate at 6.75%,” he said.
He further said the PMI services stood strong of 60.3 in July and is above 60 for 7 consecutive months which indicates robust expansion of services.
“Healthy balance sheets of banks and corporates, thrust on capex by the government and visible signs of pickup in private investments could drive investment activity in the current year,” the Governor believed.
GDP growth projection:
Governor Das said the real GDP growth for the Financial Year 2024-25 is projected at 7.2%.
Real gdp growth for Q1 is projected at 7.1%, Q2 at 7.2%, Q3 at 7.3% and Q4 at 7.2%, the risks are evenly balanced, he said.
Real GDP growth for Q1 FY25-26 is projected at 7.2%.
Inflation protection:
The CPI Inflation for FY24-25 is projected at 4.5%. The Governor further said the CPI Inflation for Q2 is projected at 4.4%, Q3 at 4.7% and Q4 at 4.3%.
CPI inflation for Q1 FY25-26 is projected at 4.4, he added.
After remaining steady at 4.8% during April and May, inflation increased to 5.1% in June, the Governor said.
He said the domestic economic activity continues to be resilient. On the supply side, steady progress in southwest monsoon, higher cumulative Kharif sowing and improving reservoir levels auger very well for Kharif output.
Manufacturing activity continues to gain ground on the back of improving domestic demand, he added.
Dr. Shashanka Bhide, Dr. Rajiv Ranjan, Dr. Michael Debabrata Patra and Shri Shaktikanta Das voted to keep the policy repo rate unchanged at 6.50 per cent. Dr. Ashima Goyal and Prof. Jayanth R. Varma voted to reduce the policy repo rate by 25 basis points.
