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India's economy needs to grow even faster to deal with poverty, other challenges: Das

In order to deal with poverty and other challenges, Reserve Bank of India ( RBI) Governor Shaktikanta Das said the expansion of the India , world's fastest-growing major economy, needs to pick up to around 8 percent. The Governor stated  that while the past few years' average growth of around 7.5 percent was impressive, 'the expectation is India can be better'. He also added more structural reforms were needed in areas such as land and labor.

He is expecting that India will post real economic growth of 7.2 percent in current financial year (FY20) and is seeing below-target inflation even as rising oil prices add an upside risk. Still, he added that the inflationary impact from spikes in crude -- India's biggest import -- can be exaggerated. He further underlined 'if there is a temporary spike of oil prices and again it comes down, then obviously the impact gets moderated. Any sustained increase in crude prices will definitely have an impact on inflation, but we have to see how sustained it is'.

Higher oil prices over the longer term may hurt India's growth as well as its current account deficit, factors which would drag the rupee down. The recent oil spike is occurring against a backdrop of consumption suffering from a crisis in the shadow banking sector and exports stagnating amid a global slowdown -- all of which has seen India's growth prospects dim.

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