Mumbai, February 24: The Indian economy is now defined by high, stable, and accelerating growth supported by predictable economic outcomes, according to Poonam Gupta, Deputy Governor of the Reserve Bank of India.
Delivering the 14th Foundation Day Lecture at the Centre for Development Studies on February 20, Gupta said India’s strong macroeconomic stability, policy consistency, and diversified demand base are placing the country on a steadily improving growth path.
India Outperforms Emerging Market Peers
Gupta highlighted that India’s performance stands in contrast to many other emerging and developing economies that lack one or more of the enabling factors supporting sustained growth.She noted that over the past four and a half decades, India’s economic growth has followed a pattern of gradual but consistent acceleration, significantly outperforming other major emerging market economies.
The average growth rate stood at 5.7 per cent during the 1980s. It edged up to 5.8 per cent in the 1990s, improved further to 6.3 per cent in the 2000s, and rose to 6.6 per cent during the 2010s. Over the last four years, growth has strengthened further to 7.7 per cent.
Inflation, Current Account Deficit Show Structural Improvement
Gupta emphasized that economic expansion has been accompanied by a sharp improvement in macroeconomic indicators.Inflation, which averaged nearly 10 per cent during the 1990s, has moderated to below 5 per cent in recent years. This has narrowed the inflation gap between India and advanced economies.
The decadal average Current Account Deficit has also remained within a moderate range. It is currently estimated at 0.75 per cent of GDP over the past six years, compared to the historical average of 1.4 per cent.
Per Capita Income Rises Nearly Tenfold Since 1981
India’s per capita income growth has outpaced overall GDP growth. It has increased nearly tenfold, from USD 274 in 1981 to about USD 2,700 in 2024.Quoting forecasts from the International Monetary Fund, Gupta said per capita income is projected to reach USD 4,346 by 2030. This is expected to be supported by declining population growth and a rising working age population.
Banking Sector Emerges as Pillar of Strength
The Deputy Governor said the banking sector has emerged as a key pillar of economic strength after a decade of balance sheet repairs.The Gross Non Performing Assets ratio has declined sharply to 2.1 per cent as of September 2025, compared to more than 11 per cent during 2017 to 2018.
She described the banking system as robust and resilient, supported by a capital adequacy ratio of 17.2 per cent. This improved financial health is creating the conditions necessary to support the objectives of Viksit Bharat 2047.
Fiscal Consolidation and Capital Expenditure Focus
On the fiscal front, Gupta said India has shifted toward consolidation, prioritizing lower deficits and medium term debt targets.She added that this consolidation has been accompanied by a significant improvement in the quality of expenditure. In particular, there has been a dramatic rise in the share of capital expenditure in overall government spending, strengthening the foundation for sustained long term growth.
The Indian economy, she said, now reflects structural stability and policy continuity, positioning it on a path of durable and broad based expansion.
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