■   Indian economy projected to grow strongly despite global volatility

■   Domestic consumption and investment driving growth momentum

■   RBI prioritises financial stability alongside innovation and growth

■   Financial system remains resilient with healthy balance sheets

■   Guardrails being strengthened to manage external spillover risks

metro india news  I new delhi

The Indian economy is expected to maintain a strong growth trajectory despite a volatile and unfavourable global environment, Reserve Bank of India (RBI) Governor Sanjay Malhotra said on Wednesday. He attributed the positive outlook primarily to resilient domestic consumption and sustained investment activity, which continue to provide a solid foundation for economic expansion.

In his foreword to the latest Financial Stability Report of the RBI, Malhotra underlined that maintaining financial stability remains the central bank’s foremost objective. He described financial stability as the guiding principle for policymakers, while emphasising that it should go hand in hand with growth, innovation and consumer protection. According to him, a stable financial system is essential not only for withstanding external shocks but also for efficiently supporting the real economy.

The RBI Governor noted that financial sector regulators increasingly recognise that financial stability is not an end in itself. He stressed the importance of adopting a pragmatic and forward-looking regulatory approach that promotes innovation, enhances efficiency and safeguards consumer interests. Such an approach, he said, enables the financial system to remain dynamic while continuing to function within a strong supervisory framework.

Malhotra observed that the Indian economy and its financial system remain robust and resilient. This strength, he said, is supported by a combination of healthy economic growth, benign inflation, improved balance sheets of both financial institutions and non-financial corporates, sizeable capital and liquidity buffers, and a series of prudent policy reforms undertaken over the years.

Highlighting the role of policymakers, the RBI Governor said their most significant contribution lies in fostering a financial system that is resilient to shocks, efficient in delivering financial services and capable of promoting responsible innovation. He added that such a system enhances confidence among investors and consumers, thereby reinforcing growth momentum.

Despite the positive outlook, Malhotra acknowledged the presence of near-term risks arising from external spillovers, including global economic uncertainties and financial market volatility. However, he said the RBI and other regulators remain vigilant and continue to strengthen guardrails to protect the economy and the financial system from potential shocks.

Reiterating confidence in India’s growth prospects, Malhotra said domestic demand and investment are expected to remain the primary drivers of economic expansion. He concluded that with strong fundamentals and proactive policy measures, the Indian economy is well placed to navigate global challenges while sustaining high growth.