Mumbai: Reserve Bank of India Governor Sanjay Malhotra said that he would “prefer to wait for more certainty to emerge on the inflation trajectory in terms of the persistence of realised prints at these or higher levels, the forecast, and the likely levels to which inflation may normalise and settle for any recalibration of the policy rate”, according to the minutes of the Monetary Policy Committee meeting released on Wednesday.
The central bank chief expressed the view that elevated inflation is primarily being driven by supply-side shocks, with limited signs that price pressures are becoming broad-based.
However, he also emphasised the “need to be watchful as the risks of higher food, fuel and other input prices translating into a broad-based increase in inflation and de-anchoring of expectations persist. Any evidence of these risks materialising may need policy tightening”.
MPC member Nagesh Kumar noted that the Indian economy has displayed remarkable resilience in the face of challenging headwinds stemming from the ongoing conflict in West Asia, especially the volatility in crude oil prices, trade policy uncertainties, and agricultural risks arising from El Nino affecting the monsoons.
Fellow member Indranil Bhattacharyya observed that high-frequency indicators and early corporate results suggest sustained momentum in industrial and services sector activity of the Indian economy in Q1, while investment retained its momentum, driven by capital goods production, sustained credit growth, and the government’s continued emphasis on capital expenditure. On the external front, robust exports in goods and services cushioned high imports in Q1.
MPC member Poonam Gupta was of the view that after abating a bit in June 2026, global uncertainties flared up again in July. Domestically, the quantum and distribution of rainfall had improved in recent weeks. In addition, a range of high-frequency indicators continue to display resilience and dynamism, supporting the growth momentum. Taken together, these developments suggest that the growth outcome during the year may turn out to be somewhat better than projected in the June policy, while inflation could be marginally lower.
Among other members, Saugata Bhattacharya opined that the global economic outlook in 2026 so far has been characterised by sharp and frequent market swings, persisting inflation concerns and shifting policy expectations. India’s inflation and growth dynamics, too, continue to remain clouded, while Ram Singh said the inflation trajectory warranted close monitoring and that domestic economic dynamics required attention on both the inflation and growth fronts.
(IANS)
