Indian economy hallmarked by stable, accelerating growth: RBI
Mumbai: High, stable and accelerating growth, along with more predictable economic outcomes, have become the hallmarks of the Indian economy, Reserve Bank of India Deputy Governor Poonam Gupta has said.
Delivering the 14th Foundation Day Lecture of the Centre for Development Studies (CDS) on February 20, she said the Indian economy’s strong macroeconomic stability, policy consistency, and diversified demand base position it on a steadily improving growth trajectory.
“This is in contrast to a more modest economic promise of most other emerging and developing economies, for they lack one or more of these enabling factors,” she said.
India’s economic growth has followed a trajectory of slow but sure acceleration over the last four and a half decades, significantly outperforming other major emerging market economies, she added.
While the growth rate averaged 5.7 per cent during the 1980s, it improved to 5.8 per cent in the following decade, and 6.3 and 6.6 per cent during the decades of the 2000s and 2010s, respectively, and further to 7.7 per cent during the last four years, she said.
Gupta emphasised that the growth has been accompanied by a dramatic improvement in macroeconomic indicators.
Inflation has moderated from nearly 10 per cent in the 1990s to below 5 per cent in recent years, narrowing the inflation differential between India and advanced economies.
Similarly, she said, the decadal average Current Account Deficit has remained within a moderate range, currently estimated at 0.75 per cent of GDP over the last six years compared to the historical average of 1.4 per cent. The acceleration in per capita income has been even faster than GDP growth, increasing nearly tenfold from $274 in 1981 to about $2700 in 2024. Quoting IMF forecasts, Gupta said the per capita income would reach $4,346 by 2030, aided by declining population growth and a rising working-age population.
On the improving health of the banking sector, she said it has emerged as a pillar of strength after a decade of balance sheet repairs. The Gross Non-Performing Assets ratio fell to 2.1 per cent in September 2025, down from over 11 per cent during the 2017-18 period.
She further said that a ‘robust and resilient’ banking sector, with a capital adequacy ratio of 17.2 per cent, is now providing the necessary conditions to support the ‘Viksit Bharat’ 2047 objectives.
On the fiscal front, she said India has shifted toward consolidation with a focus on low deficits and medium-term debt targets. She noted that this consolidation has been coupled with an improvement in the quality of expenditure, specifically a ‘dramatic increase’ in the share of capital expenditure in overall spending.
