#Davos2024 | Economy will touch real #GDP growth of 7% next year, says #RBI Governor Shaktikanta Das in conversation with #NDTV's Vishnu Som.
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00:00 One of the most important announcements which have been made over the last couple of days
00:15 at the World Economic Forum and on the sidelines here in Davos, Switzerland is the India growth
00:19 story. There is nobody better placed to talk about growth in India than the RBI Governor,
00:24 Mr. Shaktikanta Das joins us now. Thanks very much for being with us. Sir, 7% extremely optimistic.
00:32 It is in line of course with what some of the global projections are. What are some of the
00:36 sectors driving this growth? You are talking of current year or next year? Yes, 2024-25.
00:41 Okay. Now let me also mention, start by saying that India has recovered from the recent
00:48 volatilities and the uncertainties and the challenges. This multiple turmoil, one after
00:53 the other, health crisis followed by all these geopolitical crises. So India has emerged out
00:59 of it a lot better. Our macroeconomic stability is far better than most other countries.
01:04 Financial stability is also, our financial sector is also doing well. And the 7% growth in the
01:12 current year, when we said it for current year, it looked optimistic. But as you know, the National
01:17 Statistical Office has given a number of 7.3%. Now talking of 2024-25, I made a statement in some
01:27 other forum yesterday, that we expect, I have a sense that the economy will touch a real GDP growth
01:36 of 7% next year. And I said this on the basis of the overall macroeconomic conditions prevailing
01:42 in the country. You see all economic activities, the momentum of economic activities are remaining
01:47 very positive. And we have reasons to believe that this positivity, this momentum will be
01:53 maintained well into next year and beyond. I have made a statement also that India has now
01:58 entered into a period of growth long haul. And economic activities are holding their ground.
02:07 Momentum of economic activity is maintained. Aggregate demand conditions are remaining
02:12 positive. Investment activity has started picking up, backed by continued high capital
02:19 expenditure by the government. Private sector capex is also picking up. And agriculture sector
02:26 in the current year and also expected to do better in the next year. So with all these confluence of
02:31 factors and with lot of activity also happening in with regard to investment in the new age
02:37 technologies like FinTech in startups and technology based activities, that gives us the
02:45 confidence to say that next year the growth should be touching, would be touching about 7%.
02:51 So inflation at what 4.5%? That is what you are projecting?
02:56 Next year average is 4.5%. You see immediately after the Ukraine war, our headline inflation
03:02 had touched 7.8%. Now thereafter, because of the monetary policy actions which we have taken,
03:09 which was also supplemented by, aided by the supply side measures taken by the government,
03:16 inflation has been steadily coming down. And we are on our way to achieve reach 4% target.
03:23 But next year's average is expected to be 4.5%. The positive aspect of it is that our inflation
03:30 is now well within the target band of inflation, but we are not satisfied with that. We would like
03:36 our inflation to reach 4% and remain around 4%. Just let me complete that bit. So therefore,
03:43 that is our endeavor. And the core inflation, there also the core inflation has now come below,
03:50 marginally below the 4% headline target. So we expect next year's average inflation to be 4.5%,
03:57 inflation to steadily moderate towards 4%. Sir, one of the areas of concern now presently,
04:05 the Red Sea scenario, there are attacks which are taking place, India's maritime supply lines
04:09 are through those waters to a large extent. Is this an area of potential concern?
04:13 You see, there are lots of global uncertainties. You just mentioned some of them. These are new
04:19 flashpoints in global geopolitics. And as we stand today, India is quite well placed to deal
04:28 with these challenges. How these Red Sea area conflicts and how the movement of ships, etc.,
04:35 ships, etc., are going to pan out are things which have to be watched and monitored. And I think
04:41 there are various national governments, including India, are doing their best to see that the
04:47 movement of our ships or ships coming towards India and all are not disrupted. And a final
04:53 question, sir, the last couple of days, we've seen lots of interesting conversations, for example,
04:57 on artificial intelligence, also the overall state of the world economy, India remains a clear
05:02 outlier. You see, at the general systemic level, there is a lot of interest around India. India is
05:09 outlier in the sense that the rest of the world is not witnessing contraction. The rest of the
05:16 world has escaped the earlier apprehensions of a hard landing. But nonetheless, global growth
05:24 and individual country growth have slowed down. In the middle of all this, India is recording
05:29 7% plus growth. Inflation also, most of the countries as in India have moderated. But every
05:38 country, including India, we are yet to reach our target levels. That is an area which receives our
05:46 continued focus. And in this, I would like to mention two points where there is a lot of
05:53 interest shown by my interaction with people from other countries. It shows there is a lot of
05:59 interest about how the fintechs, how the technology sector, how the startups are doing in India.
06:05 There are a lot of questions about the Reserve Bank, Central Bank, digital currency,
06:10 which we have launched the eRupee now, which is based on blockchain technology and what has been
06:15 our experience, how we see this, what is the potential of it, how we are going about it.
06:21 There is a lot of interest around CBDC of the Reserve Bank of India. There is a lot of interest
06:27 about UPI. Countries are asking questions. They would like to have it in their countries.
06:33 So in the area of technology, in fintech, in payment systems, there is a lot of interest.
06:38 And these are areas where conventionally, there was not so much interest on India. But this time
06:45 around, I find there is a lot of interest on these areas. Indeed, sir. Thank you very much
06:49 for speaking to us. The RBI Governor talking to us, telling us among other things where India's
06:54 GDP growth is projected to be for 2024-2025. The inflation numbers, much better now. Things
06:59 are coming out of the COVID situation we saw, but also a great deal of interest over here
07:03 in Davos, Switzerland.
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