RBI Governor meets Nirmala Sitharaman ahead of central bank meeting

During 2021-24, gross domestic product (GDP) growth will average over 8%. (document)

New Delhi:

Central Bank Governor Shaktikanta Das held an off-agenda courtesy meeting with Finance Minister Nirmala Sitharaman on Wednesday, just ahead of the central bank’s meeting to decide on the benchmark policy rate Two weeks in advance.

The Das-led Monetary Policy Committee (MPC) is scheduled to meet from April 3 to 5, its first meeting of the fiscal year 2024-25.

The Monetary Policy Committee meeting is expected to shed light on the inflation and growth trajectory for the financial year starting April 1.

In its latest policy released in February, the Reserve Bank of India projected growth of 7% in fiscal 2025 and an inflation outlook of 4.5%.

A bulletin issued by the Reserve Bank of India on Tuesday said food price pressure is an obstacle to retail inflation quickly falling to the Reserve Bank’s 4% target.

Retail inflation, based on the Consumer Price Index (CPI), has been declining since December and stood at 5.09% in February.

The report further stated that the global economy is losing momentum, with growth slowing in some of the most resilient economies, and high-frequency indicators pointing to further stabilization in the coming period.

In India, real GDP growth reached the highest level in six quarters in the third quarter of 2023-24, helped by strong growth momentum, strong indirect taxes and lower subsidies.

An article on “economic conditions” in the central bank’s March bulletin said that high visibility of structural demand and healthier corporate and bank balance sheets are likely to be motivating forces for future growth.

The report also stated that India can maintain an annual GDP growth of 8%, and favorable macroeconomic configuration may become a springboard for upgrading the country’s growth trajectory.

During 2021-24, gross domestic product (GDP) growth will average over 8%.

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