The Reserve Bank of India wants the country to target real GDP growth of at least 7 per cent next fiscal amid an environment of macroeconomic stability.
“In India, potential output is picking up with actual output running above it, although the gap is moderate. In 2024-25, the objective should be to sustain this momentum by securing real GDP growth of at least 7 per cent in an environment of macroeconomic stability,” the central bank said in its bulletin.
Accordingly, inflation needs to align with the target by the second quarter of the year, as projected, and get anchored there. “Balance sheets of financial institutions need to be strengthened and asset quality improved even further. The ongoing consolidation of fiscal and external balances needs to continue. The gains of the transformative technological change that is underway must be harnessed for inclusive and participative
growth in a sound risk-free environment. Above all, the virtuous thrust to investment from government capex must be partnered and even led by the corporate sector, supplemented by foreign direct investment,” the article said.
In the words of Shri Shaktikanta Das, Governor, “new opportunities are knocking at our doors. It is for us to capitalise on them. There has to be a greater focus on investment in capacity building, skilling of human resources and adoption of newer technology by all players. The international confidence on India’s prospects is at a new high; it is an opportune time to make this India’s moment and work towards strong, sustainable and inclusive growth,” it added.
Global growth
The weak global outlook can be brightened if geopolitical conflicts end and their repercussions through commodity and financial markets, trade and transportation, and supply networks are contained.
Inflation must be vanquished, paving the way for financial conditions to ease in support of growth. The adverse effects of climate change must be addressed.
Re-globalisation must commence. Advanced economies need to resuscitate growth impulses and boost consumption and investment as the lingering effects of past price shocks dissipate. In emerging market economies, investment has to be rekindled and the ongoing weakening of potential growth and productivity reversed to open up space to address issues relating to high debt levels and macroeconomic stability.
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