India's growth story intact; need reforms in agri markets: RBI Guv

Reserve Bank Governor Shaktikanta Das on Thursday said the Indian growth story remains intact with consumption and investment demand growing in tandem, and emphasised that pastre forms need to be augmente d by reforms in land, labour and agricultural markets. The governor also asked financial institutions to create tailored products to suit businesses promoted by women and MSMEs without diluting underwriting standards.

In his inaugural speech at the annual FIBAC 2024 Conference organised jointly by FICCI and IBA, Das spoke on issues relating to strengthening the financial sector and expectations from them. The governor said that the Indian economy is forging ahead with macroeconomic and financial stability and a favourable growth-inflation balance. He said the Indian economy is now at a critical juncture and massive changes are taking shape invarious sectors and markets.

He said the country is geared for orbital shifts and the nation's journey towards b e c o m i n g an advanced economy is drawing strength from a unique blend of factors -- a young and dynamic population, a resilient and diverse economy, a robust democracy, and a rich tradition of entrepreneurship and innovation. The National Statistical Office (NSO) has placed India's GDP growth at 6.7% in the first quarter of 2024-25.

He said private consumption, which is the mainstay of aggregate demand with a share of around 56% in GDP, has rebounded to 7.4% growth from a feeble 4% growth in the second half of the previous year, reconfirming the revival of rural demand. "The headline number (Q1 GDP), however, came lower against the backd rop of muted gove r nme n t expenditure of both the centre and the states, perhaps due to the Lok Sabha elections.

Excluding government consumption expenditure, GDP growth works out to 7.4%," he said. Stressing that the government expenditure of the centre and the state governments are likely to pick up pace in line with the budget estimates in the remaining quarters of the year, Das said: "The Reserve Bank's projection of GDP growth at 7.2% for 2024-25 does not appear out of place". He further said the Indian economy would need a multi-pronged and multisectoral approach.