India’s gross domestic product in the financial year 2022-23 could be more than the estimated 7 per cent, said Reserve Bank of India governor Shaktikanta Das.
“I will not be surprised if the GDP growth comes slightly above 7 per cent,” said Das speaking at a Confederation of Indian Industry event here in New Delhi. He said this on the basis of strength in various macro fundamentals. In the Economic Survey document for 2022-23 released earlier this year, the forecast was that India may grow at 7 per cent. The Economic Survey has projected a baseline GDP growth of 6.5 per cent in real terms for the next financial year 2023-24.
Speaking about India’s monetary policy and what could be its future move, he said it was not in his hands but depended on various factors on the ground.
“It’s not in my hands. It all depends on the situation on the ground. I am driven by what’s happening on the ground and what is the outlook on the ground and what are the trends or how is the inflation softening.”
The RBI, in its first monetary policy review meeting this fiscal in April, decided to keep the key benchmark interest rate — the repo rate (the rate at which the RBI lends to other banks) — unchanged at 6.5 per cent, to assess the effects of the policy rate tightening done so far.
The central bank conducts six bi-monthly reviews of its monetary policy in a financial year.
Barring the recent pause, the RBI has raised the repo rate by 250 basis points cumulatively since May 2022 in the fight against inflation. Raising interest rates is a monetary policy instrument that typically helps suppress demand in the economy, thereby helping the inflation rate decline.
Das told the gathering at the CII event that the recent decision on the repo rate (keeping it unchanged) should be looked at as a monetary policy pause and not a pivot.
RBI’s next monetary policy review meeting is scheduled to be held during June 6-8, 2023.