India’s inflation rate peaked at 7.8 per cent in April and is now gradually coming down, according to RBI Governor Shaktikanta Das, who said that while there may be slight bumps in the inflation trend, the overall trajectory will be mostly downward going ahead.
This confidence stems from various favourable factors, including the easing in crude oil prices and softening in commodity and food prices, Das told Zee Business in an interview on Friday.
The inflation is likely to come down to around 5 per cent by June 2023, he said, adding that despite the positive trends there is no room for complacency when dealing with inflation.
The Consumer Price Index (CPI)-based inflation rate was above the 7 per cent mark for the first three months of the financial year. It eased to a five-month low of 6.7 per cent in July but remains above the RBI’s target range of 4-6 per cent.
Addressing criticism from some segments of the market that claim the RBI has been ‘behind the curve’ in dealing with inflation, Das said the central bank is well in sync with the current situation and that the central bank’s policy so far has been on the right track.
The April-Jun GDP growth number at 13.5 per cent was below the RBI’s estimate of over 16 per cent growth. Das said that the central bank is studying the data and has identified some areas where the discrepancy was higher, which will be addressed in the upcoming monetary policy meeting on Sep 30.
While growth has been slightly hit due to the focus on combating elevated inflation, the RBI has taken measures to minimise the impact on growth, said Das, adding that tackling inflation remains the top priority.
Even as the world economy is facing unprecedented challenges, the Indian economy has proved to be resilient. Further, India should and is capitalising on the disruptions in the global supply, as an opportunity to boost economic growth supported by strong fundamentals, Das said, adding that he remains confident about India’s growth.
Digital lending norms
The RBI Governor said that the recent guidelines on digital lending have “by and large” been accepted positively by lending platforms. He said that the new norms are based on three underlying themes — that they be consumer-centric, be based on risk assessment, mitigation and minimisation in digital lending, and increased transparency.
Given that customer awareness is paramount, Das said that he believes that these guidelines will be very effective going forward. He added that keeping the banking sector and the financial system robust and strong has always been a focus of the RBI.