The Reserve Bank of India (RBI) has released its annual report for the fiscal year 2023-24, highlighting expectations of reduced inflation and a GDP growth rate of 7% in FY25. Here are the key insights from the report released on May 30.
Economic Growth Amidst Challenges
Despite facing various challenges, the Indian economy showed growth in FY24. The RBI reported an 11.1% increase in its balance sheet.
Expenses decreased significantly by 56.3%, and domestic net income rose by 5.7% to Rs 88,100 crore.
Net income surged from Rs 87,420 crore to Rs 2.11 lakh crore, while foreign source income grew by 23.2% to Rs 1.87 lakh crore.
Additionally, total expenditure dropped from Rs 1.48 lakh crore to Rs 64,694 crore.
Positive Outlook for FY25
The RBI anticipates a 7% GDP growth rate in FY25, driven by expected good rains leading to strong agricultural performance and a reduction in inflation. Lower inflation is projected to boost consumption.
The report also acknowledged global economic challenges, which have impacted the growth of the IT sector in FY24, but remains optimistic about overall economic improvement in FY25.
Additional Highlights from the RBI Report
Regulations for Self-Regulatory Units: New rules will be introduced for self-regulatory units in the financial markets.
Technology Upgrades: The RBI plans to upgrade technology for liquidity management operations.
Consolidated LAF Instructions: Consolidated instructions will be issued for the Liquidity Adjustment Facility (LAF).
Liquidity Operations: These will be conducted in alignment with the monetary policy.
e-Rupee Pilot Expansion: The scope of the e-Rupee pilot scheme will be expanded to offline mode.
IFSC Regulations Review: The regulations under the Foreign Exchange Management Act (FEMA) will be reviewed.
Cross-Border e-Rupee Consideration: The use of e-Rupee for cross-border payments is being considered.
Monetary Policy Focus: There will be a continued focus on price stability within the monetary policy framework.
The RBI’s annual report indicates a cautiously optimistic outlook for India’s economy, with expected improvements in growth and inflation metrics in the coming fiscal year.
