India is moving towards achieving 8% annual GDP growth on a sustainable basis, Reserve Bank of India (RBI) governor Shaktikanta Das said at an event in Mumbai on Tuesday.
“India is at the threshold of a major structural shift in its growth trajectory, moving towards 8% GDP growth in a sustained manner,” the governor said, adding that he was confident of India achieving 7.2% GDP growth in FY25, as per the RBI forecast.
During the last three years, India’s GDP has been rising by an average of 8.3% on the back of critical reforms. The biggest growth driver, Das said, was the introduction of the Goods and Services Tax (GST), and introduction of the insolvency and Bankruptcy Code (IBC) and launch of flexible inflation targeting model.
“Among the structural reforms at the forefront, I would like to mention the GST. It will avoid tax on tax, its cascading effect…GST, I think, has been one of independent India’s biggest structural reforms since 1947,” Das said. GST collections have been between Rs 1.5-Rs 1.7 trillion a month and have made businesses more efficient, he added.
Further, while India’s retail inflation is moderating, it is doing so at a very slow pace and the central bank will remain most cautious on this front as one weather related event may lead to hike in food prices, Das said.