ASSOCHAM Appreciates RBI’s Calibrated Approach, with GDP growth forecast at 6.6% for FY27 and inflation within the target band
Shri Nirmal Kumar Minda, President, ASSOCHAM, congratulates and appreciates the well-calibrated measures undertaken by the RBI to create a promising approach to growth and to control inflation.
RBI’s steps to support trade and industry, such as bearing the full hedging cost until 30th September 2026, restoring export proceeds to 9 months, increasing the limits for investment by NRIs and OCIs in equity instruments traded on the stock market without SEBI registration, and expanding the universe of ‘specified securities’ to include all new issuances of 15-, 30- and 40-year tenor G-secs, are highly appreciable, said Mr. Nirmal K Minda.
Mr Minda said that Repo Rate hikes are ineffective against supply-side shocks, weaken economic growth drivers, and that there is no strong correlation between the Repo Rate and CPI, particularly when inflation is driven by supply-side shocks.
At this juncture, the RBI’s rational approach is highly commendable, as the rise in inflation is short-lived and will decline sharply once the conflict in West Asia is resolved.
ASSOCHAM believes that a stable repo rate is an effective way to address inflation caused by supply-side disruptions. Stable interest rates will support demand and potentially benefit investments, consumption, employment, and overall economic growth.
In the current global environment, marked by uncertainty and supply chain challenges, policy measures that improve supply conditions, enhance productivity, and ensure market stability will yield better outcomes.
A balanced policy approach is essential to contain inflation while sustaining growth momentum and business confidence.
We are happy to note that, despite such headwinds, CPI Inflation is projected at 5.1% for the year 2026-27, which is still below the upper band of 6%, said Mr Minda.
In such a situation of global headwinds, a GDP growth projection of 6.6% highlights the strong resilience of the Indian economy, backed by the various measures undertaken by the Government over the past many years, said Mr Minda.
The banking and financial system remains healthy, with strong credit growth, comfortable liquidity conditions, and banks and NBFCs maintaining adequate capital buffers. India’s external sector also remains relatively stable, supported by strong services exports, remittances, and foreign exchange reserves of USD 682.3 billion, said Mr Minda.
We at ASSOCHAM believe that the recent policy announcements by the Government and RBI will help the economy maintain its high economic growth trajectory in the current financial year.
We appreciate that, to strengthen capital inflows and support the balance of payments, the RBI announced several measures, including easing investment norms for foreign investors, expanding access to government securities, encouraging foreign-currency deposits, and promoting external commercial borrowings.
Moreover, global investor interest in the Indian economy is strong, and India attracted FDI of USD 94.5 billion in FY 2025-26, with the trend remaining resilient at the beginning of the current financial year as well, said Mr Minda.
Going ahead, although the West Asian conflict remains uncertain and without any meaningful resolution, the resilience of the Indian economy will remain strong and bright within the global economic system, said Mr Nirmal K Minda.
