Indian RBI sees GDP growth at 9.5% but warns of Omicron risk
The Reserve Bank on Wednesday retained the GDP growth forecast at 9.5 per cent for the current fiscal but cautioned that the economic recovery is not yet strong enough to be self-sustaining and durable.
In an address after the three-day meeting of the Monetary Policy Committee, RBI Governor Shaktikanta Das said managing a durable, strong and inclusive recovery is the central bank's mission.
"We need to be persevering, patient and persistent in our efforts. We also need to be aware, alert and agile to the new realities confronting us. Our efforts over the past one year and nine months have given us the confidence and a head start to face the challenges that lie ahead," he said.
Das, whose tenure as the governor was extended by three years recently, further said the Indian economy is relatively well-positioned on the path of recovery but it cannot be immune to global spillovers or to possible surges of infections from new mutations, including the Omicron variant.
"Hence, fortifying our macroeconomic fundamentals, making our financial markets and institutions resilient and sound, and putting in place credible and consistent policies will assume the highest priority in these uncertain times," Das said.
According to him, incoming information indicates that consumption demand has been improving, with pent-up demand getting reinforced by the festive season.
Rural demand is exhibiting resilience and farm employment is picking up with the robust performance of agriculture and allied activities.
The recent reductions in excise duty and state VAT on petrol and diesel should support consumption demand by increasing purchasing power, Das said.