Concur with RBI’s revised estimate of 7% GDP growth estimate for FY24: DEA Secretary

At the sidelines of an industry event, Seth said the economy still faces headwinds in the form of inflation despite logging high growth during the first two-quarters of this fiscal.

“Certainly, (we) agree with the RBI’s assessment. It is quite obvious (with) the growth, which India has achieved in the first half of the year and then two months in the current quarter. HFIs (high-frequency indicators) are showing good momentum so this upward revision is well spaced,” Seth said.

“But stickiness is there. The policy goal (for inflation) is 4%, plus minus 2%. We are some distance (away) from (achieving) 4%. Whatever supply-side measures that have to be taken for food products will continue to be taken,” Seth said.

Seth said geopolitical issues — the conflicts in West Asia and Ukraine — continue to be a challenge.

“But spillover of the conflict (in Israel) has not happened and that is one potential risk that is well contained. Oil prices continue to be subdued and that is good for the global economy,” he said.

Seth said that Central Bank Digital Currency (CBDC) or e-rupee can help halve the cost of cross-border remittances to 2-3 per cent.

“At the moment, cross-border payment is not a very efficient system, it takes time. At the same time, there is a cost factor,” Seth said.

He said remittances to India are around $100 billion annually and compared to the global level of 8-9 per cent, the cost in India is low at 5 per cent of each transaction value.

The introduction of CBDC was announced in the Union Budget 2022-23 by Finance Minister Nirmala Sitharaman. The RBI began the pilot wholesale CBDC project on November 1, 2022, while the pilot on the retail version was launched on December 1, 2022.