The Reserve Bank of India (RBI) head, Sanjay Malhotra, showed trust in India’s growth path. He said that a growth rate of 7% is possible and should be the aim. He spoke after the Monetary Policy Committee (MPC) lowered the repo rate by 25 shares to 6.25%. This is the first cut in five years.
India’s chance for growth and inflation view
“India can hit a 7% growth rate and more, and we need to push for it,” Malhotra said. Even with the lower rates, the RBI kept its GDP growth guess for the 2024–25 year at 6.6%. It expects a small rise to 6.7% for 2025–26.
On the topic of rising prices, Malhotra said that keeping prices steady helps focus on growth. He assured that the RBI is keen on managing money flow while trying to meet its 4% goal for inflation. In December 2024, India’s Consumer Price Index (CPI) inflation was at 5.2%, and the Wholesale Price Index (WPI) grew to 2.37% from 1.89% in November.
Boosting consumer safety and money rules
Talking about money safety, Malhotra made clear the RBI’s aim to protect consumers. He warned that banks that act in the wrong way, including misselling, will be dealt with. The bank also promised to help with cases of money fraud.
RBI Deputy Governor Swaminathan J said that most issues with bank rules are fixed by talking directly with the banks. Only the worst cases are shared with the public. He added that the RBI keeps costs for following rules fair before making new ones.
On money flow rules, Malhotra said banks would be given enough time to prepare for the new Liquidity Coverage Ratio (LCR) rules to stop market problems. He also said that the expected credit loss plan is still being discussed, with no new rule. New rules for project finance should be ready by March 2026.
Dealing with global risks
Malhotra noted that global money issues could affect India’s growth. Still, he pointed to the positive signs like strong manufacturing, steady consumer spending, and sound farm output, which help India’s economy look bright.
While it works on growth, the RBI keeps a balanced approach, ready to change with new trends. As the world faces risks, India’s money rules will keep changing to ensure economic strength while looking to grow in the long run.
