PM says growth should be RBI's top most priority next decade, with trust and stability

The Reserve Bank has to accord "top-most priority" to growth and at the same time focus on trust and stability, Prime Minister Narendra Modi said on Monday. Addressing the inauguration of the event commemorating 90 years of the Reserve Bank of India (RBI) here, Modi said the next decade is as important for attaining the goal of developed India as it is for the RBI, which will complete 100 years of existence in 2035.

Modi said as per the "mantra" of the central bank, "The RBI should make fast growth its top-most priority, along with focusing on trust and stability." Since 2016, keeping inflation under check has become the primary goal of the RBI. Often, there are voices who have pitched for additional attention to growth through measures like rate cuts.

The comments come days ahead of the first monetary policy review of the new fiscal year. Modi said the "reflection" of double-digit inflation rate was not visible in the financial policies earlier, and claimed credit for giving the RBI the rights to take decisions to curb inflation. The six-member monetary policy committee (MPC) has also done some very good work on its mandate over the years, Modi said.

The government's efforts, including delivering on fiscal consolidation and active price monitoring, also helped in the cooling of inflation, he added. Modi said inflation is at a "moderate level", despite the Covid pandemic or the challenges posed by wars in various countries.

India followed a path where it took care of both financial prudence concerns and also the requirements of the common man during the pandemic, he said. At a time when many countries of the world are still struggling to come out of the shocks suffered during the pandemic, the Indian economy is creating new records, Modi said. He said balancing inflation control and growth is a unique need for every developing country and urged everybody to study the right monetary tools to wrestle with this challenge. The PM said the RBI can create a model and play a leadership role that will help the broader Global South.