India to be among fastest growing economies despite global challenges: RBI

India is expected to be among the fastest growing major economies this fiscal, geopolitical turbulence notwithstanding, RBI Governor Shaktikanta Das opined at last month's meeting of the rate setting panel MPC while going with the majority to raise the repo rate by 50 basis points to tame inflation.

On September 30, the six-member Monetary Policy Committee (MPC), headed by Das, had raised the short-term lending rate for the third consecutive time by 50 basis points to take the repo rate to 5.9 per cent. In May, the repo rate was hiked by 40 basis points.

Except for Ashima Goyal, who favoured a 35 basis points hike, the other five members had voted for 50 basis points increase in the repo rate.

As per the minutes of the MPC meeting released by the RBI on Friday, Governor Das had said that economic activity was steadily improving, though there were mixed signals.

"While high frequency indicators are showing continued momentum in activity, global factors are putting pressure on external demand.

"The growth projection of 7.0 per cent for 2022-23, therefore, carries risks which are broadly balanced. Whatever be the unfolding scenario, India is expected to be among the fastest growing major economies in the world," the minutes quoted him as saying.

RBI Deputy Governor and MPC Member Michael Debabrata Patra had stressed that monetary policy has to perform the role of nominal anchor for the economy as it charts a new growth trajectory.

The focus, he said, should be on being time consistent in aligning inflation with the target.

"In this context, front-loading of monetary policy actions can keep inflation expectations firmly anchored and balance demand against supply so that core inflation pressures ease," Patra said.

The RBI, which has been tasked to ensure retail inflation remains at 4 per cent (with margin of 2 per cent on either side), has failed to meet the target for three consecutive quarters, and now will have to submit a report in this regard to the government.