India's economic growth appears to be very fragile, says RBI Monetary Policy Committee member Varma

Jayanth R. Varma said he expects inflation to remain high in 2022-23 but come down significantly in 2023-24

India's economic growth appears to be 'very fragile' and it may fall short of what the country needs to meet the aspirations of its growing workforce, RBI Monetary Policy Committee (MPC) member Jayanth R. Varma said on February 26.

In India, Mr. Varma said he expects inflation to remain high in 2022-23 but come down significantly in 2023-24.

"However, growth appears to be very fragile, and monetary tightening is compressing demand," he told PTI.

Explaining further, he said rising EMI payments increases the pressure on household budgets and dampens spending, and exports are struggling in the face of global factors.

While noting that high interest rates make private capital investment more difficult, Mr. Varma said the government is in fiscal consolidation mode, thus reducing the support to the economy from this source.

"Because of all these factors, I fear that growth may fall short of what we need to meet the aspirations of our growing workforce given our demographic context and income level," he said.

The Reserve Bank of India (RBI) has projected India's economic growth at 6.4 per cent for 2023- 24. Gross Domestic Product (GDP) growth is estimated at 7% in 2022-23, according to the first advance estimate of the National Statistical Office (NSO).