New Delhi, Mar 13 (KNN) India must achieve an 8 per cent GDP growth rate to ensure sustainable progress, said Challa Sreenivasulu Setty, Chairman of the State Bank of India (SBI).
While the current growth rate hovers around 6 per cent, Setty believes this slowdown is temporary and that India’s long-term economic trajectory remains strong.
Encouragingly, private consumption is rebounding, as indicated by a rise in Private Final Consumption Expenditure (PFCE) to 7.6 per cent. However, some sectors, such as automobiles, have seen a slowdown since December.
Setty acknowledged concerns over global trade uncertainties affecting private investments but remained optimistic. He highlighted SBI’s corporate lending pipeline of Rs 4 lakh crore, with half already sanctioned.
He believes that as consumption strengthens, private sector investment will follow, helping India inch closer to the crucial 8 per cent growth target.
In an interview with The Indian Express, Setty emphasised the need for increased private capital expenditure, particularly in core industries like steel and cement, which have reached 75-76 per cent capacity utilisation. He stressed that higher investment in these sectors is essential for boosting overall economic growth.
Consumption, both rural and urban, is a key factor in achieving the 8 per cent target, Setty noted. While rural consumption remains stable, future trends will depend on post-rabi harvest performance.
On the urban front, the recent budget proposal eliminating tax on annual incomes up to Rs 12 lakh is expected to drive spending.
India’s GDP grew by 6.2 per cent in the December 2024 quarter, with full-year growth projected at 6.5 per cent.. The Reserve Bank of India (RBI) has forecasted a 6.7 per cent growth rate for 2025-26.
(KNN Bureau)
