India's Economy Strong: RBI Deputy Governor Poonam Gupta Says Growth Expected by December 2025

India's economy is growing well, according to RBI Deputy Governor Poonam Gupta. This is better than many other countries facing problems.
By Newsroom | Economy, India |

The Indian economy is demonstrating resilience and a strong growth outlook, according to Reserve Bank of India (RBI) Deputy Governor Poonam Gupta. Despite global economic headwinds, domestic factors such as supportive fiscal policies, structural reforms, and robust consumption are underpinning this stability. Gupta’s assessment suggests that India is well-positioned to achieve its economic goals, including attaining emerged market status in the coming years. The central bank's focus remains on adapting its statistical frameworks to ensure accurate policy formulation in a rapidly evolving economic landscape.

Context: Policy Actions and Economic Drivers

Poonam Gupta assumed the role of Deputy Governor at the Reserve Bank of India in May 2025, bringing a wealth of experience in monetary, fiscal, and trade issues. Her academic background includes a PhD and Master's degrees in Economics from the University of Maryland, USA, and a Master's degree from the Delhi School of Economics. Prior to joining the RBI, she served as the Director General of the National Council of Applied Economic Research (NCAER).

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Since her appointment, Gupta has been an active voice on the Monetary Policy Committee (MPC). Her public statements and interviews highlight a consistent theme: India's economy is on a strong growth trajectory. This optimism is largely attributed to:

  • Supportive Fiscal Policy: Gupta has repeatedly stated that fiscal policy has been "strongly supportive of growth." This includes improvements in the tax system, a greater emphasis on capital expenditure over revenue spending, and enhanced fiscal transparency.

  • Structural Reforms: Reforms are identified as essential for driving stronger economic growth. These, combined with the economy's structural strengths, contribute to India's growth acceleration.

  • Monetary Policy Framework: The current inflation-targeting framework is seen as suitable for India's current income level and growth stage. Public feedback on a discussion paper suggested maintaining the current framework, with a focus on headline consumer price index (CPI) as the target.

  • Resilient Growth and Domestic Demand: The economy benefits from a resilient growth rate, entrepreneurship, the availability of key inputs, and strong domestic consumption. India's demographic advantages also differentiate it from economies reliant on a limited number of sectors.

  • Attaining Emerged Market Status: Gupta believes that continued reforms, a resilient growth rate, and effective monetary policy frameworks are putting India on course to attain the status of an emerged market economy in the coming years.

Gupta has also addressed concerns about global market volatility and fluctuations in the Indian rupee, stating that these are not "alarming." She has indicated that the strong growth outlook leaves scope for further monetary policy easing.

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Adapting Statistical Systems for Policy Formulation

A key focus for the RBI, under Gupta's purview, is the strengthening of India's statistical architecture. This involves improving the timeliness and accuracy of major economic indicators like GDP, CPI, and IIP.

  • Base Revision: The upcoming base revision of these indicators is considered of "foundational importance" due to the rapid changes in consumption and production baskets, and the realignment of global and domestic supply chains.

  • Data Dissemination: The RBI is accelerating publication cycles for economic data, with the time lag for releasing quarterly balance of payments data reduced from 90 days to around 60 days.

  • Data Sources: The RBI curates, compiles, and disseminates a vast amount of economic and financial data, including surveys designed to provide early signals of shifts in economic activity and sentiments. Enterprise surveys are being comprehensively reviewed, and household surveys are under evaluation to address the gap between perceived and realized inflation.

  • Inflation Forecasting: Gupta has stressed that the RBI uses a multi-layered approach for inflation forecasting, acknowledging that forecast errors are common globally. The inflation forecasts used in MPC resolutions are considered "unbiased."

Expert Analysis: Stability and Preparedness

Poonam Gupta's extensive experience in economic policy is seen as a significant asset for the RBI. Colleagues note her intellectual breadth and vast experience in dealing with monetary, fiscal, and trade issues as crucial for finding a fine balance between fiscal-monetary coordination, particularly during uncertain times.

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Gupta has also emphasized the need for India to prepare for future shocks. She has written extensively on tackling the impact of potential global events, such as the "Trump tantrum," and has highlighted the importance of being prepared both ex ante (beforehand) and ex post (afterwards) for such events.

Conclusion: A Steady Course Forward

The evidence suggests that RBI Deputy Governor Poonam Gupta views India's economic situation with considerable optimism, grounded in strong policy frameworks and structural advantages. The economy's resilience is being bolstered by a combination of supportive fiscal measures, ongoing reforms, and robust domestic demand, positioning it for continued growth and the potential achievement of emerged market status.

A significant area of focus for the RBI under Gupta is the continuous enhancement of its statistical capabilities. This is deemed essential for accurate policy decisions in a dynamic economic environment. While global uncertainties persist, the internal strength and adaptability of the Indian economy appear to be key factors in navigating these challenges. The emphasis on data accuracy and timely dissemination underscores a commitment to informed policymaking.

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Frequently Asked Questions

Q: What is the current state of India's economy according to RBI Deputy Governor Poonam Gupta?
RBI Deputy Governor Poonam Gupta says India's economy is strong and growing well. This is because of good government plans and changes made to help businesses.
Q: Why does Poonam Gupta think India's economy is doing well?
She believes that helpful government money plans, important business changes, and people spending money in India are making the economy strong. These things help India grow even when other countries have problems.
Q: What is India's economic goal, and will it be reached?
India wants to become a developed market economy. Poonam Gupta thinks India is on the right path to reach this goal in the next few years because of its steady growth and good policies.
Q: What is the RBI doing to help make good economic decisions?
The RBI is working to make its economic information, like GDP and inflation numbers, faster and more correct. This helps them make better plans for the economy.
Q: Are global problems affecting India's economy?
Poonam Gupta says that global problems are not causing big worries for India's economy. The strong growth inside India helps protect it from outside issues.
Q: When can we expect to see these positive economic results?
The outlook is positive, with expectations of continued strong growth and progress towards developed market status in the coming years, as noted by Poonam Gupta in late 2025.