Reserve Bank of India (RBI) Governor Shaktikanta Das on Thursday urged the private sector to step up to the task of supporting sustainable growth in the economy by investing in a significant manner, especially at a time when consumption demand was showing clear signs of a revival.

Observing that the key demand drivers of consumption, investment and exports would have to move in tandem to sustain economic momentum, Mr. Das said: “Higher domestic consumption would help insulate the economy from the vagaries of external uncertainties. Investment remains critical for sustainable growth of the economy and, given the current confluence of favourable factors, it is time for the private corporate sector to come forward in a big way”. 

The potential of external demand could also be utilised to India’s advantage by getting integrated into the global supply chains, he added.

Asserting that the Indian economy was now at a critical juncture with massive changes taking shape in various economic sectors and markets, and that the country was geared for orbital shifts, the RBI Governor said India’s journey towards becoming an advanced economy was drawing strength from a unique blend of factors including young and dynamic population; resilient and diverse economy; robust democracy, and a rich tradition of entrepreneurship and innovation.

Addressing ‘FIBAC 2024’, jointly organised by FICCI and IBA, Mr. Das said first-quarter GDP data from the NSO showed that notwithstanding the moderation in growth from the previous quarter, the fundamental growth drivers were “gaining momentum”.

“It is evident that India is on a sustained growth path. Consumption and investment demand... are growing in tandem. Government expenditure of the Centre and the States is likely to pick up pace in line with the Budget Estimates in the remaining quarters,” he noted, adding that the strong balance sheets of banks and corporates had created congenial conditions to further support private capital spending.

“RBI’s projection of GDP growth at 7.2% for 2024-25 does not appear out of place,” he stressed.

On inflation, Mr. Das said while the balance between growth and inflation was well poised, the RBI needed to “successfully navigate the last mile of disinflation, and preserve the credibility of the flexible inflation targeting (FIT) framework,” which was a major structural reform.

“The best contribution that monetary policy can make for sustainable growth is to maintain price stability,” he reiterated.