RBI Governor Sanjay Malhotra

BS EDIT: Why India must avoid policy adventurism

By Business StandardPublished On Jan 15, 2025
inflation

Inflation dips, but relief is limited

Inflation fell to 5.22% in December, but uncertainties remain. The RBI’s MPC is unlikely to cut rates in February as projections for the next fiscal year remain unclear

GDP

Growth slows down

GDP growth slowed to 5.4% in Q2 FY25. With FY25 growth estimated at 6.4%, the lowest since the pandemic, economic challenges continue to mount

Rupee

Rupee faces pressure

The rupee has depreciated by over 1% in 2025, driven by global capital outflows. India’s reliance on foreign savings adds to economic concerns

jerome powell federal reserve

Global factors complicate policy

US policy shifts and rising crude oil prices increase inflation risks. These global uncertainties challenge India’s economic stability

Rupee

Rupee depreciation’s impact

While aiding competitiveness, rupee depreciation raises import costs. A rate cut now could deter foreign investment, worsening the situation

RBI

Focus on stability

The government must prioritise growth and fiscal discipline. The RBI should maintain price and financial stability to navigate uncertain times