RBI Deputy Gov Patra Calls 7% GDP Growth In FY24 A ‘Conservative Estimate’

RBI's Deputy Governor, Michael Patra, stated that the real GDP growth seen in the first half of the current fiscal year beat all estimates, including that of the regulator.

The regulator upgraded its growth projection for FY24 from 6.5 per cent to 7 per cent earlier in the day.

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The Reserve Bank of India Deputy Governor, Michael Patra, said on Friday that the revised GDP growth outlook of 7 per cent given by the regulator is a ‘conservative estimate’. The regulator upgraded its growth projection from 6.5 per cent to 7 per cent earlier in the day along with stating that the repo rate will remain unchanged following the Monetary Policy Committee’s bi-monthly policy rate review meeting.

Speaking to the media after the MPC meeting’s announcements, Patra stated that the real GDP growth seen in the first half of the current fiscal year beat all estimates, including that of the regulator. He noted that if the RBI’s estimates for the second half of FY24 are added, the GDP growth for the fiscal would come out at 6.9 per cent, reported PTI.

However, the robust data for October and November indicate strong economic activity, “So at the current time, 7 (per cent) is like a conservative estimate,” he added. While analysts were expecting the central bank to raise the forecast, the 0.50 per cent increase was not anticipated. 

Regarding growth, Governor Shaktikanta Das noted that two-wheelers logged demand as high as 20 per cent during the festive season and the fast moving consumer goods companies also saw a recovery in rural demand. Further, private capital expenditure in sectors like steel, cement, chemicals, and petroleum is showcasing signs of resurgence, and the capacity utilisation reached a limit of 74 per cent, Das added. 

“It has reached a point where we can expect private investment also to start picking. Many companies in the manufacturing sector are using their own internal reserves and surpluses to invest. They're not approaching the bank or they're not resorting to any other kind of borrowing or raising funds. They're using their own internal reserves and surplus for investment,” Das stated. The Governor noted that global confidence in the Indian economy is increasing gradually.