RBI Annual Report: India’s Macroeconomic Landscape Remains Promising

This past week, the Reserve Bank of India (RBI) released its annual report for the year ended March 2024 (FY24). The report provides many insights, not just into the past fiscal year but the current one as well.

India's economic outlook remains positive as the government increases expenditure on infrastructure and other growth-driving sectors while maintaining its fiscal consolidation objectives. The RBI forecasts a 7% GDP growth for the current financial year.

According to the report, the Indian economy expanded vigorously in 2023-24, with real GDP growth accelerating to 7.6% from 7% in the previous year, marking the third consecutive year of 7% or higher growth. The report attributes this robust growth to strong investment demand, supported by healthy balance sheets of banks and corporates, the government's emphasis on capital expenditure, and prudent monetary, regulatory, and fiscal policies.

During the financial year, the RBI's balance sheet expanded by 11.08%, reaching Rs 70,48,000 crore. Notably, its net income surged to Rs 2,11,000 crore in the fiscal year 2024, compared to Rs 87,420 crore in the preceding year. This increase was attributed to a significant rise in interest income from foreign securities, highlighting the central bank's prudent management of currencies and global market treasury operations. With interest income on the rise and provisions declining sharply, the surplus received a notable boost.