The improved CPI data for April has given the Reserve Bank of India (RBI) confidence that monetary policy is on track, said Governor Shaktikanta Das on Friday.
“The inflation numbers give me and my colleagues at RBI a reasonable amount of confidence that monetary policy is on the right track,” said Das at the launch of Amitabh Kant’s book, Made in India.
The CPI inflation print for April came in at 4.7 per cent, much lower than 5.7 per cent for March, according to data released on Friday.
Das said all high-frequency indicators reflect that urban demand continues to be strong, and rural demand has started picking up and will continue to be supported by a good rabi crop. Further, the month-on-month momentum continues to improve, aided by government spending and capital expenditure.
There is also clear indication of private investment picking up, led by sectors such as steel, cement and petrochemicals, among others, he said, adding that India is expected to contribute 15 per cent of the world’s growth in FY24.
“We have given a projection of 6.5 per cent from the RBI and we are quite optimistic and a fairly confident that the actual growth will be close to that,” he said, adding that the RBI has also shared its thoughts with the IMF, which has projected a slightly lower growth for FY24.
Another thing that has helped India, which includes “some amount of luck”, is the stability of the Indian rupee, which is crucial for business, private sector and private investors to function, in addition to attracting foreign investment into the country, he said.
Das said the Indian economy needs to continue the reforms which have been initiated across the financial sector and otherwise, with increased focus on technology.
“We need to focus more on technology because access to technology, thanks to the global fragmentation which has taken place due to the kind of geopolitics we are witnessing today and may continue even in the coming years.”
This also necessitates increased expenditure on research and development, not just in the government but also the private sector, he said.