RBI Governor Shaktikanta Das Meet Finance Minister Ahead Of MPC

This meeting occurred approximately two weeks prior to the central bank's scheduled meeting to deliberate on the benchmark policy rate

The Reserve Bank of India’s (RBI) Governor Shaktikanta Das held a non-agenda courtesy meeting with Union Finance Minister Nirmala Sitharaman on Wednesday. This meeting occurred approximately two weeks prior to the central bank's scheduled meeting to deliberate on the benchmark policy rate. The Monetary Policy Committee (MPC), chaired by Das, is slated to take place from April 3 to April 5, marking its inaugural session for the fiscal year 2024-25.

The upcoming MPC meeting is anticipated to provide insights into the inflation and growth trajectory for the fiscal year commencing on April 1. In its previous policy announcement in February, the RBI projected a growth rate of 7 per cent and forecasted inflation to hover around 4.5 per cent for FY25. However, a recent RBI bulletin released on Tuesday highlighted that food price pressures are impeding a more rapid decline in retail inflation toward the Reserve Bank's target of 4 per cent.

The Consumer Price Index (CPI)-based retail inflation has exhibited a downward trend since December, registering at 5.09 per cent in February. Additionally, the report noted a global economic deceleration, with growth moderating in several resilient economies and leading indicators indicating a further stabilisation in the foreseeable future. In the Indian context, the real Gross Domestic Product (GDP) growth attained a six-quarter pinnacle in the third quarter of the fiscal year 2023-24. This upsurge was propelled by formidable momentum, resilient indirect taxes, and reduced subsidies.

An article in the central bank's March bulletin discussing the 'State of Economy' highlighted the robust structural demand and improved corporate and bank balance sheets, which are expected to serve as key catalysts for future growth. 

The bulletin also suggests that India has the potential to maintain an annual GDP growth rate of 8 per cent, and the favourable macroeconomic landscape could act as a catalyst for further elevating the country's growth trajectory. Notably, the gross domestic product (GDP) growth has consistently averaged above 8 per cent over the period spanning 2021 to 2024.