April CPI data gives confidence monetary policy is on track: RBI chief

The improved CPI data for April has given confidence to the Reserve Bank of India (RBI). Monetary policy is on courseGovernor Shaktikanta Das said on Friday.

“The inflation numbers give me and my colleagues at RBI a reasonable level of confidence that monetary policy is on the right track,” Das said at the launch of Amitabh Kant’s book Made in India.

CPI inflationary pressures for April came in at 4.7 percent. significantly lower than 5.7 percent in Marchaccording to data released on Friday.

Das said all high-frequency indicators suggest urban demand remains strong and rural demand has started to rise and continues to be supported by a good Rabi harvest. In addition, month-on-month momentum continues to improve, supported by government spending and capital spending.

There are also clear signs of a pickup in private investment, led by sectors such as steel, cement and petrochemicals, among others, he said, adding that India is expected to contribute 15 percent to global growth in FY24.

“We got a forecast of 6.5 percent from the RBI and are quite optimistic and quite confident that the actual growth will be close to that figure,” he said, adding that the RBI also shared its thoughts with the IMF habe forecast slightly lower growth for fiscal year 24.

Another thing that has helped India, which includes “a measure of luck,” is the stability of the Indian rupee, which is vital to the functioning of businesses, the private sector and private investors, as well as attracting foreign investment to the country , he said .

Das said the Indian economy must continue the reforms that have been initiated across the financial sector and elsewhere, with an increased focus on technology.

“We need to focus more on technology because access to technology has happened and may continue for years to come thanks to global fragmentation due to the type of geopolitics we are experiencing today.”

This will also require higher spending on research and development, not only in the government but also in the private sector, he said.