Mumbai: India would already be growing at 8 per cent if the world outside had not kept getting in the way. That was the blunt assessment from Reserve Bank of India Deputy Governor Poonam Gupta on Tuesday, at a banking and finance summit in Mumbai.
Gupta, who has handled monetary policy at the central bank, said real GDP growth would have exceeded 8 per cent but for the external shocks of the last three years. India has still grown at more than 7 per cent in what she called an inconducive environment, thanks to stronger systems and digital infrastructure built at home. “Just based on the strength of that work, we would have already been an 8 per cent growth economy,” she said.
She did not present 8 per cent as a forecast. She presented it as potential held back. If the global environment gets better, she said, another 50 basis points to 1 percentage point of growth could come just from that.
A long list of shocks, one after another
Speaking at the annual Business Standard BFSI Insight Summit, Gupta listed high United States tariffs, surging oil prices, deficient monsoon rainfall and capital outflows as shocks India has faced, often at the same time. Global investors, she noted, have shifted money towards artificial intelligence related activity elsewhere, adding to the outflows.
“I would like to believe that India has been subjected to more shocks than perhaps any other economy in the world. You name the shock and India was potentially impacted,” she said.
The backdrop this week underlines her point. Brent crude has been trading near $115 a barrel, close to a six-month high, after attacks on Saudi oil infrastructure raised fears of supply disruption. The rupee settled at 95.11 against the dollar on Tuesday after snapping a three-day fall, under pressure from importer demand for dollars and foreign fund outflows.
Why growth kept going anyway
The economy grew 7.8 per cent in the April to June quarter of the current financial year, Gupta said, and that momentum continued into the second quarter. She cited tax collections, bank credit growth, exports, purchasing managers’ index readings and industrial and infrastructure activity as signs that the pace had held up.
Behind those indicators, she traced a longer arc. Growth acceleration began with the 1991 economic reforms, she recalled, and work since then has strengthened systems, built digital infrastructure and made states important partners in growth. A 7 per cent economy in a calm world and a 7 per cent economy in a storm are not the same achievement, she argued.
From 7 per cent to 8 per cent: what it will take
Getting to 8 per cent or more will need deliberate effort, not just a better global mood, Gupta said. India must improve competitiveness in new sectors, keep pace with technological change and invest in human capital. She compared the shift to moving from an A grade to an A-plus. Three levers came up again and again:
- Learn from others: study what worked in other countries and adapt it, rather than assuming domestic demand alone will carry growth higher.
- Raise investment at home: lift domestic investment so growth does not depend only on favourable winds from abroad.
- Secure foreign investment: attract foreign direct investment into sectors where India wants lasting competitiveness.
Fuel, finance and food: the pressure points now
Gupta was specific about what worries her most right now. Fuel and external finance remain a challenge, she said. Dearer oil raises costs across the economy, while tighter external finance makes capital scarcer and dearer.
On food, she sounded more confident. “Food is not a challenge; if anything, we are becoming an exporter. This year is El Nino, but even then it is managed very well,” she said. Fiscal policy, she added, can cushion the first impact of supply shocks through targeted supply-side measures, but must stay consistent with fiscal prudence and macroeconomic stability.
What it means beyond the summit hall
Gupta’s remarks do not promise cheaper loans or more jobs tomorrow. They describe headroom: if the world steadies, India could grow meaningfully faster without a new miracle at home, because the domestic foundations are already in place.
Independent economists, in a separate Reuters poll published this week, still expect growth of 7.1 per cent in the financial year ending March 2027, easing to 7.0 per cent the year after. That sober expectation is why Gupta’s 8 per cent point lands. It is not the consensus forecast. It is the gap between what India is managing in difficult conditions and what it might manage in better ones.
FAQs
Who is Poonam Gupta?
Poonam Gupta is a Deputy Governor of the Reserve Bank of India who has handled the central bank’s monetary policy department.
What did she say about 8 per cent growth?
She said real GDP growth would have exceeded 8 per cent but for external shocks over the last three years, and a better global environment could add 50 basis points to 1 percentage point to growth.
Where and when did she say it?
She spoke on Tuesday at the annual Business Standard BFSI Insight Summit in Mumbai.
Does this mean India will grow at 8 per cent next year?
No. Gupta described potential held back by external shocks, not a forecast. Economists polled by Reuters expect about 7.1 per cent in the year ending March 2027.
What must India do to reach 8 per cent?
Improve competitiveness in new sectors, keep pace with technology, invest in human capital, raise domestic investment and secure foreign direct investment, while keeping fiscal policy prudent.
India’s growth debate will move on quickly to the next data release. Gupta’s contribution is a useful yardstick: not just how fast the economy grows, but how fast it could grow when the world stops holding it back.
