Sanjay Malhotra, the governor of the RBI, said that India may now reach the 6.7% growth trend. During his remarks at the press conference after the MoP on Friday, February 7, 2025, Malhotra emphasized the need for customers to have higher expectations.
“These are tough questions to answer, but I would like to stick my neck out and say that India can certainly achieve a 6.7% growth rate, and we should aspire for it,” Malhotra said when asked whether such a target was feasible.
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Full Projections
Based on the Economic Survey, the Indian government has anticipated its growth for FY 2025-26 to be around 6.3-6.8%. In contrast, RBI has raised the growth for the same period at 6.7%.
While speaking the MPC, Sanjay expressed big economic predictions such as projections made by the RBI for the inflation rate. It is likely that the FY 2024-25 is to be estimated at 4.8%, while FY 2025-26 is supposed to be projected at 4.2%.
When asked about the balance between growth and inflation, Malhotra reiterated that the RBI’s primary goal remains inflation control and price stability while maintaining economic expansion. “We will continuously focus on aligning inflation with the target while supporting growth,” he said.
Inflation to Moderate
According to Malhotra, inflation is now on a downtrend, which opens up space for a more growth-supportive policy stance.”Inflation is expected to decline further, and we will maintain a neutral stance to proactively respond to evolving macroeconomic conditions,” he stated.
The RBI stated 4.8% inflation in 2024–2025 and a fall to 4.2% in 2025–26. It has given the quarterly inflation estimates for 2025-26 as Q1: 4.5%, Q2: 4.0%, Q3: 3.8%, and Q4: 4.2%.
Food Inflation Expected to Ease with the Arrival of Favorable Rabi Crop.
First Rate Cut in 5 years
In a landmark decision, the RBI unanimously reduced the policy rate by 25 bps from 6.5% to 6.25%, its first rate cut in five years. The governor credited this action to a favorable rabi harvest, improved food price stability, and a reduction in inflationary pressures.
Reiterating the central bank’s commitment to growth and price stability, Sanjay stated, “A less restrictive monetary policy is more appropriate at this juncture,”
A favorable rabi harvest and increased food price stability, according to Sanjay, helped to ease inflationary pressures.
Reiterating the central bank’s commitment to growth and price stability, Malhotra stated, “A less restrictive monetary policy is more appropriate at this juncture,”
The RBI’s Take
According to Malhotra, the RBI’s foreign exchange policy is unchanging: it does not aim to influence the exchange rate or promote a stable and orderly market. The RBI can promote growth while controlling inflation because the macroeconomic climate is favorable and the inflation forecast is stable.
