4 min readMumbaiMar 13, 2025 08:58 AM IST
First published on: Mar 13, 2025 at 04:04 AM IST
INDIA definitely needs to grow at 8 per cent to progress, and this needs consumption and private capital expenditure, said Challa Sreenivasulu Setty, Chairman, State Bank of India, the largest bank in the country with a deposit base of Rs 52.29 lakh crore.
“India definitely requires a growth rate of 8 per cent to progress, but this (current) growth rate (of around 6 per cent) is not to be really worried about… We must realise that the slowdown which we are talking about could be a blip. The long-term story of India is intact,” Setty told The Indian Express in an interview.
According to him, while private capital expenditure is happening in certain sectors, the core sectors, such as steel and cement, must start to invest. “They all have reached the capacity utilisation of 75-76 per cent,” he said.
Setty, who took charge as SBI Chairman in August 2024, is of the view 8 per cent growth needs consumption to pick pace. “Rural consumption is alright, but we may have to see the trend post rabi harvesting. But broadly some of the indicators are better. In terms of urban consumption, the expectations of consumption have been created. Now, the Budget proposed there will be no tax on annual income up to Rs 12 lakh,” he said.
The Indian economy grew 6.2 per cent during the quarter-ended December 2024 and is estimated to grow 6.5 per cent for the full year 2024-25. The Reserve Bank of India (RBI) has projected a GDP growth rate of 6.7 per cent for the next financial year 2025-26.
Setty said the economic data indicates private consumption in the current quarter has picked up. The Private Final Consumption Expenditure (PFCE) has reached 7.6 per cent, which means that the consumption is coming back. “There are certain sectors which are slightly slower than others, such as the auto segment. The auto sector witnessed very good growth in October-November, but December onwards it has slowed down. But overall, private consumption seems to be moving in a positive direction,” he said.
Referring to private sector investment, the SBI Chairman said companies seem to be worried about external factors. “…how tariffs are going to work out or if a particular country is not able to export, then whether the dumping will happen here. But I think these are all concerns which we feel that can be overcome,” Setty said.
Once consumption picks up, private capital expenditure will happen in the sector which is not witnessing (private capex). “Otherwise, if you see our (SBI’s) pipeline of corporate lending is about Rs 4 lakh crore…half of it is sanctioned but yet to be disbursed and half of it is under discussion. This is a significant pipeline and the sectors also are diversified other than the core sector,” the SBI Chairman said.
On tariff wars, Setty said the broader assessment is that the export basket of India is diversified, both in terms of products and also in terms of geographies. “While every export matters, and even if you are exporting $10 billion or $20 billion to the US, the impact will be there, but it will not be as significant in our view. What is the most important in the whole tariff talk is about the narrative,” he said.
Challa Sreenivasulu Setty, Chairman, State Bank of India. (Photo: Ganesh Shirshekar) 
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