Reserve Bank of India (RBI) Governor Shaktikanta Das has called on the corporate sector to ramp up investments to bolster India's economic growth. Speaking at the FIBAC 2024 - Banking for Viksit Bharat event in Mumbai, Das highlighted the current strong growth trajectory of India’s economy, driven by several key economic factors gaining momentum.

Key Points from Das's Address:

Call for Increased Corporate Investments: Das urged the corporate sector to make substantial investments, stating, “It is time for the corporate sector to come forward in a big way to step up investments as visible signs of private investments are happening.” He emphasized that the Indian economy is at a critical juncture, with significant changes across various sectors poised to drive substantial growth.

Supportive Economic Factors: Das outlined the unique blend of factors supporting India’s progress toward becoming an advanced economy. These include a young and dynamic population, a resilient and diverse economy, a robust democracy, and a rich tradition of entrepreneurship and innovation. He noted that reforms such as the Goods and Services Tax (GST) and the Insolvency and Bankruptcy Code (IBC) have produced long-term positive outcomes and advocated for additional reforms in land, labor, and agricultural markets.

Focus on Female Labor Force Participation: Das stressed the need to improve female labor force participation, which currently lags behind the global average. He highlighted a recent report forecasting that India must achieve a GDP growth rate of 8% over the next five years. To reach this goal, women must constitute more than half of the new workforce created by 2030. Das called for financial institutions to develop tailored products to support women-led businesses without compromising underwriting standards.

Support for MSMEs: Addressing the challenges faced by micro, small, and medium enterprises (MSMEs), Das pointed out that many remain small due to various factors. He urged banks to create tailored financial products for MSMEs to help them scale up. Das also mentioned that only regulated entities would be allowed on the Unified Lending Interface (ULI) platform to ensure prudent lending, emphasizing that ULI will not be a select club of a few players.

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Positive Outlook for Food Inflation: With a favorable monsoon and healthy Kharif sowing, Das indicated that the outlook for food inflation could improve. He reiterated that maintaining price stability is crucial for sustainable growth, as India continues to make remarkable progress in reducing poverty.

Das's remarks underscore the need for a collaborative effort between the corporate sector, financial institutions, and policymakers to support India's economic growth and address existing challenges.

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