Reserve Bank of India (RBI) Deputy Governor Poonam Gupta stated that India's economy is well-positioned to achieve a growth rate of 7.5% going forward, despite ongoing global challenges including oil-price shocks, geopolitical risks, and potential weather disruptions. Delivering a lecture on 'Indian Economy: Shocks, Resilience and the Way Forward' at the Madras School of Economics in Chennai, she noted that while the central bank has projected a growth rate of 6.7% for the current year, high-frequency indicators and external analyses suggest actual figures may turn out higher.
According to Gupta, the resilience observed in the Indian economy is structural rather than accidental. She attributed this stability to strong policy frameworks, fiscal prudence, healthy external buffers, a diversified economy, and a banking system that is both resilient and increasingly efficient. She noted that India's growth in recent years has averaged 4.8 percentage points higher than advanced economies and 2.5 percentage points higher than emerging-market economies. The services sector remains the strongest performer, while agriculture and industry have also achieved steadier trajectories.
Providing a personal assessment of the current account situation, the RBI Deputy Governor indicated that India could potentially become a current-account-neutral economy within five to six years, assuming the absence of major global shocks like an oil-price spike. On the foreign direct investment (FDI) front, she noted that India attracted approximately $95 billion last year, with the possibility of inflows reaching $150 billion annually if current trends persist.
Highlighting internal economic drivers, Gupta stated that RBI's ongoing work indicates growth is increasingly supported by improvements in labour and capital quality, alongside total factor productivity, rather than merely scaling up input quantities. Furthermore, she pointed out that India's inflation rate in recent years has remained close to the average of advanced economies and significantly lower than the average inflation rates experienced across emerging market and developing economies.
Geographical and trade diversification have also played a vital role in maintaining economic stability. Gupta cited examples such as diversifying the import pool for oil and expanding export destinations following trade tariffs imposed by the United States. Additionally, she observed that individual states across India are currently recording faster growth rates than in the past.
"Dr. Shishir Gupta, Founder & CEO of StartupLanes, notes: 'The positive macroeconomic indicators outlined by the RBI Deputy Governor, including steady GDP growth projections, controlled inflation compared to emerging markets, and strengthening foreign investment trends, create a highly favorable environment for the Indian startup and business ecosystem. A resilient banking sector and diversified trade pathways reduce systemic vulnerabilities, giving founders and venture capitalists greater confidence to plan long-term capital deployment and business expansion in India.'" — Dr. Shishir Gupta, Founder & CEO, StartupLanes
