Is the Indian economy ready for high growth despite global challenges?
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Synopsis
RBI Governor Sanjay Malhotra reveals that the Indian economy is on the brink of significant growth despite external challenges. This article explores the resilience shown amidst inflation control and regulatory improvements, offering a glimpse into India's economic future.
Key Takeaways
- Indian economy shows resilience despite global headwinds.
- Inflation rates have significantly reduced.
- Real GDP growth accelerated to 8.2 percent.
- GST rationalization has boosted spending.
- Ongoing reforms are essential for sustained growth.
New Delhi, Dec 23 (NationPress) In spite of a challenging and adverse global landscape, the Indian economy has demonstrated extraordinary resilience and is set to achieve significant growth, stated RBI Governor Sanjay Malhotra. He pointed out that the favorable outlook on inflation has enabled us to sustain a supportive growth environment.
“We will actively address the economic demands while maintaining macroeconomic stability,” he remarked in the Central Bank’s December Bulletin.
Reflecting on the past year, which has been both eventful and challenging, he expressed satisfaction with the progress made thus far.
The economy experienced strong growth alongside manageable inflation; the banking sector further solidified, and regulatory improvements were implemented to fortify the financial framework, enhance business operations, and bolster consumer safeguards, Malhotra noted.
As we approach the new year, “we carry forward our hopes, energy, and resolve to further back the economy and quicken growth,” he added.
Since the policy update in October, the Indian economy has witnessed swift disinflation, with inflation falling to remarkably low levels.
For the first time since adopting flexible inflation targeting (FIT), the average headline inflation for a quarter at 1.7 percent in Q2 2025-26 dipped below the lower tolerance threshold (2 percent) of the inflation target (4 percent), dropping further to a mere 0.3 percent in October 2025.
“Conversely, real GDP growth surged to 8.2 percent in Q2, supported by strong festive spending and the streamlined goods and services tax (GST) rates. With inflation at a manageable 2.2 percent and growth at 8.0 percent in H1 2025-26, we are witnessing a rare ‘goldilocks period’,” Malhotra remarked.
Looking forward, domestic elements like robust agricultural prospects, ongoing GST rationalization, manageable inflation, sound corporate and financial institution balance sheets, and favorable monetary conditions should continue to bolster economic activity, Malhotra emphasized.
“Ongoing reform efforts will further promote growth,” he concluded.
Point of View
It's clear that the Indian economy's resilience amid global challenges is a testament to its structural strengths. The proactive stance of the RBI in ensuring macroeconomic stability while supporting growth initiatives is commendable. Moving forward, fostering a conducive environment for sustainable development will be crucial.
NationPress
23/12/2025
Frequently Asked Questions
What does RBI Governor Sanjay Malhotra say about the Indian economy?
He emphasizes that the Indian economy is resilient and on track for significant growth despite global challenges.
How has inflation impacted the Indian economy?
Inflation has decreased to unprecedented lows, allowing the RBI to maintain a supportive growth environment.
What are the expectations for GDP growth?
Real GDP growth accelerated to 8.2 percent in Q2, supported by strong spending.
What factors are supporting economic activity in India?
Healthy agricultural prospects, GST rationalization, and favorable monetary conditions are key factors.
What does Malhotra say about future reforms?
He believes ongoing reforms will further facilitate growth in the economy.
