India Macro Fundamentals: Reserve Bank of India Director General: Macro factors are strong, no pressure on balance of payments – The

At a conference organized by the Isaac Center for Public Policy at Ashoka University, Gupta said India has inherent and structural strengths – strong one-way fiscal transfers, net services exports, which are doing very well, and foreign direct investment. While noting an increase in portfolio flows, she noted that the situation would change due to structural factors.Asked about the impact of the war on remittances, the Reserve Bank of India deputy governor said that as tension eased, migrants would return to West Asia and reconstruction coupled with “revenge spending” would help going forward.Gupta was optimistic about the economy, saying growth has surprised (higher than original expectations) on the positive side over the past three years, with around 7.5% and inflation remaining below 4%. Given that the situation remains dynamic, the RBI will assess the growth and inflation outlook before the Monetary Policy Committee meeting next month, she said.In a detailed presentation on the monetary policy framework, Gupta said that monetary policy and fiscal policy work to achieve macroeconomic stability. The monetary policy framework, with an inflation target of 4%, which can move in a range of 2-6%, has served India well, she added.