Das emphasises price stability amid strong GDP projections

Mumbai, April 19

The success in controlling inflation has to be preserved and taken forward to achieve a 4 per cent inflation target on a durable basis, RBI Governor Shaktikanta Das stressed during the MPC meeting even as other members expressed concerns over the impact of geo-political developments on the price situation.

The RBI on Friday released the minutes of the Monetary Policy Committee (MPC) meeting on Friday. It maintained status-quo on the benchmark lending rate (repo) at 6.5 per cent since February 2023 on concerns over inflation after the three-day MPC meeting held from April 3 to 5. Five of the six MPC members voted for the status quo in the policy rate.

It’s our mandated goal

The strong growth momentum, together with our GDP projections for 2024-25, gives us the policy space to unwaveringly focus on price stability. Price stability is our mandated goal and it sets strong foundations for a period of high growth. —Shaktikanta Das, RBI Governor

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MPC member Jayanth R Varma, however, advocated a reduction in the repo rate by 25 basis points as “high-interest rates entail a growth sacrifice”.

According to the minutes, Das said the economic growth prospects of the Indian economy in 2024-25 look bright. He further said the baseline projections show inflation moderating to 4.5 per cent in 2024-25 from 5.4 per cent in 2023-24 and 6.7 per cent in 2022-23.

“This success in the disinflation process should not distract us from the vulnerability of the inflation trajectory to the frequent incidences of supply-side shocks, especially to food inflation due to adverse weather events and other factors,” the governor said.