Growth rate can be more than seven percent: RBI Governor
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The National Statistical Office (NSO) had said in the second advance estimate released in February that the growth rate of the Indian economy would be seven percent in the financial year 2022-23. It was 8.7 percent in the financial year 2021-22. There is a possibility that the growth rate may be higher than this estimate, Das said at the annual function of industry body CII here.
Reserve Bank of India (RBI) Governor Shaktikanta Das on Wednesday expressed hope that the growth rate in the financial year 2022-23 will be more than the advance forecast of seven percent. He said that this is likely to happen due to the strong economic activity in the third and fourth quarters. The National Statistical Office (NSO) had said in the second advance estimate released in February that the growth rate of the Indian economy would be seven percent in the financial year 2022-23. It was 8.7 percent in the financial year 2021-22. There is a possibility that the growth rate may be higher than this estimate, Das said at the annual function of industry body CII here.
It will not be a surprise if the GDP growth of the last financial year is more than seven per cent. The Provisional Annual Estimates of growth for the financial year 2022-23 ending March 31 will be released on May 31. Explaining the reason behind the possibility of higher growth rate, Das said, in the third quarter, it seemed that economic activity was getting support due to stagnant demand. But in the fourth quarter, all economic indicators suggested that economic activity had picked up. He said that almost all the 70 indicators monitored by the Reserve Bank indicated that the pace of growth would continue in the fourth quarter.
In such a situation, we should not be surprised if the growth rate remains a little over seven per cent, he added. As far as the current financial year is concerned, the RBI has estimated the growth rate to be 6.5 percent this year. On the demand of stopping the increase in the policy interest rate, the RBI governor said that it is not in his hands to do so as it depends on the ground situation. In April, the RBI surprised everyone by keeping the key policy rate (repo) unchanged at 6.5 per cent. Earlier, the central bank has increased the repo rate by two and a half percent from May 2022. Das said that suggestions have come to the RBI not to increase the policy rate in the upcoming monetary review meetings, but it is not in their hands to do so.
“It depends on the ground situation. Whatever is happening at that time, I have to decide accordingly. See what the trend is. Is inflation increasing or has it softened. ”With this, the governor said that as far as reining in the increase in the repo rate during the April monetary review is concerned, it should be seen only as a pause. There is no example. He said retail inflation has moderated but there is no room for complacency on this front. He said the rate of inflation in the next data of retail inflation is expected to be below 4.7 per cent.
Inflation based on the Consumer Price Index stood at 4.7 per cent in April. Das assured the attendees that the Indian banking system remains stable and robust, with strong capital, cash position and improving asset quality. He said that the Reserve Bank will extend full support to the economy to ensure financial stability of the country. He said that the Reserve Bank has further improved the Central Bank Digital Currency (CBDC) framework based on its experience so far.
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