Former RBI Governor Duvvuri Subbarao at a program organized by Siddharth Academy of General and Technical Education in Vijayawada on Tuesday. | Photo credit: KVS GIRI
Former Reserve Bank of India (RBI) Governor Duvvuri Subbarao said that although inflation is currently at multi-year lows, growth has been reasonably strong at around 6.8 percent, with the government optimistic that it may even cross 7 percent. With the rupee remaining more or less stable, the RBI is still cautious about cutting the repo rate as it waits for the economy to absorb the full pass-through of previous rate cuts, he added.
Mr. Subbarao was in Vijayawada to attend a program organized by Siddharth Academy of General and Technical Education (SAGTE) on Tuesday. Global uncertainties related to tariffs pose risks to growth prospects and financial stability, he said. Decisions on interest rates must therefore take into account not only growth and inflation, but also the impact on domestic savings, so it is far from a clear-cut case, he added.
He insisted that maintaining price stability, promoting economic growth and ensuring financial stability were interrelated goals, and said that achieving all three simultaneously required careful balancing rather than simple, linear decisions.
Pointing out that India is on track to become a $5 trillion economy by 2028-29, he said the real challenge will be to ensure that the benefits of growth are distributed to all sections of society. To this end, private investment will be key and the sooner it picks up, the stronger and more sustainable India’s growth trajectory will be, he explained.
Responding to a question on employment, Mr. Subbarao admitted that even as more young people enter the workforce, the quality of jobs should improve through policy reforms to ensure productive and well-paid opportunities. He said if India is to truly claim the status of the fastest growing major economy and achieve the Viksit Bharat vision by 2047, growth will have to remain in the 7.5-8 percent range consistently. This requires balanced development and an ecosystem that creates high-quality jobs, he said.
Mr. Subbarao also hailed the Unified Payments Interface (UPI) as a transformative tool for financial inclusion and local entrepreneurship. He said that even individuals with minimal literacy are now able to run small businesses using digital payments. “While such transactions may seem small, they provide banks with valuable information about customer cash flow and business viability,” he explained.
Published – 25 Nov 2025 21:06 IST
