India's economic momentum has gained significant traction with the economy projected to grow by 8.1% in the October-December quarter, according to the latest National Statistics Office (NSO) estimates. This growth follows an 8% rise in the first half of the financial year ending March 2026, marking a continuation of robust economic performance. The National Statistics Office recently projected a 7.4% real GDP growth for the 2025-26 fiscal year, representing a noticeable improvement from the previous year's 6.5%. As per Devdiscourse News Desk, the second estimates, out February 27, may differ due to methodological adjustments, but the overall trajectory remains positive. This sustained growth momentum reflects the virtuous cycle of accelerated growth and macroeconomic stability that RBI Deputy Governor Poonam Gupta highlighted in her recent assessments.
According to reports from The Times of India, deputy governor Poonam Gupta delivered the 14th Foundation Day Lecture at the Centre for Development Studies on February 20, highlighting India's economic transformation. Gupta emphasized that growth has accelerated in recent years and the Indian economy is assured of a continuously improving economic trajectory. She noted that India's expansion has become more durable and predictable, with high, stable and accelerating growth becoming hallmarks of the Indian economy. The deputy governor added that the Indian economy has slowly but surely accelerated at the pace of 0.03 percentage points a year, with the acceleration in per capita income growth being even faster. As reported by The Economic Times, Gupta stated that India is experiencing a "virtuous cycle of accelerated growth and macroeconomic stability" with the economy now more resilient to both internal and external shocks. According to Rediff Money, Gupta highlighted that this is in contrast to a more modest economic promise of most other emerging and developing economies, for they lack one or more of these enabling factors.
As reported by The Economic Times, Gupta highlighted that the Indian economy is not just growing at an accelerated pace; it is also depicting enhanced macroeconomic stability which is reflected in a whole host of economic outcomes becoming steadier. She noted that inflation has shown visible and sustained signs of moderation and much reduced volatility, with inflation moderating over time and declining relative to other countries. The deputy governor emphasized that for India, most of these indicators have remained in a healthy range over the last four decades with notable improvement in recent years. According to Rediff Money, Gupta noted that inflation has moderated from nearly 10 per cent in the 1990s to below 5 per cent in recent years, narrowing the inflation differential between India and advanced economies. She pointed out that the strength of a large and well diversified economy is more apparent now and policy decisions are becoming more timely and nimble than ever before. The decadal average Current Account Deficit (CAD) has remained within a moderate range, currently estimated at 0.75 per cent of GDP over the last six years compared to the historical average of 1.4 per cent. As reported by ANI, Gupta noted that the resilience of India's current account deficit can be attributed to its diversified sources of inflows, which have only strengthened over time, with services exports and remittances significantly contributing to robust inflows.
According to The Economic Times, Gupta dubbed the improvement in the health of the banking sector as "dramatic" and stated that Indian banks at present are structurally in a better shape relative to their peers in many other countries with visible improvement in key financial ratios. She noted that the capital to risk-weighted assets ratio of scheduled commercial banks rose to 17.2% in September 2025, comfortably above the regulatory minimum, while asset quality improved markedly to multi-year highs. The deputy governor highlighted that the gross non-performing asset (GNPA) ratio declined to 2.1% in September 2025 from 2.5% a year earlier and is much below the 5% seen in the previous two decades. As reported by Rediff Money, Gupta stated that the Gross Non-Performing Assets (GNPA) ratio fell to 2.1 per cent in September 2025, down from over 11 per cent during the 2017-18 period, representing a dramatic improvement. She noted that a robust and resilient banking sector, with a capital adequacy ratio of 17.2 per cent, is now providing the necessary conditions to support the 'Viksit Bharat' 2047 objectives. According to The Economic Times, Gupta noted that the Indian economy is well supported by a robust and resilient banking sector and the rapid expansion of the non-banking space. Despite robust credit growth at 14.6%, Scheduled Commercial Banks show muted deposit growth at 12.5%, as highlighted by State Bank of India's recent report.
According to Rediff Money, the acceleration in per capita income has been even faster than GDP growth, increasing nearly tenfold from USD 274 in 1981 to about USD 2700 in 2024. Gupta quoted IMF forecasts indicating that per capita income would reach USD 3051 by 2026 and USD 4,346 by 2030, aided by declining population growth and a rising working-age population. The deputy governor expressed optimism about India's long-term economic prospects based on structural factors. She noted that these trends are likely to continue in the years to come, aiding rapid increase in per capita incomes. Her assessment suggests that India's economic trajectory remains on an upward path with predictable economic outcomes becoming increasingly characteristic of the Indian economy. According to The Economic Times, Gupta observed that India's population growth has traditionally been significantly higher than that of the world. However, over the years it has declined at a faster rate than the global rate and, since about 2014, at par with the growth rate in world population. According to Rediff Money, Gupta noted that the oil intensity of GDP (consumption of oil per unit of GDP) has been declining consistently, which is expected to persist as the Indian economy transitions towards more focus on renewable energy and improved overall energy efficiency.
Since the early 1990s, India's economy has consistently outpaced global growth, expanding its share of the world economy from roughly 1.1% in 1991 to an estimated 3.5% in 2024. This economic outperformance has narrowed the gap in per capita GDP relative to the world average, increasing threefold from approximately 7% in 1991 to close to 20% in 2024. GDP growth rates demonstrate a clear acceleration, averaging 5.7% in the 1980s and climbing to 7.7% in the last four years, with no significant periods of prolonged stagnation recorded. However, analyst consensus suggests that the sustained realization of these ambitious targets will likely hinge on the government's capacity to implement further economic reforms and navigate the complexities of the evolving global economic order. Potential headwinds include global economic fragmentation, characterized by geopolitical tensions and shifting trade alliances, which could disrupt export-driven growth and supply chains. The ability to consistently absorb and integrate foreign investment, particularly in manufacturing and high-tech sectors, remains a key determinant of sustained per capita income gains beyond current projections.