Growth outlook is softer and below expectations: RBI Governor Sanjay Malhotra

Even though growth is strong by current reckoning, its outlook is softer and is expected to be below Reserve Bank of India’s aspirations, RBI Governor Sanjay Malhotra observed during the last Monetary Policy Committee (MPC) meeting, the minutes of which was released on Wednesday (October 15, 2025).

“The benign outlook for headline and core inflation as a result of the downward revision of projections opens up policy space to further support growth. However, several growth-inducing policies unveiled by the Government and the Reserve Bank should help growth, going ahead,” he observed.

Stating that the cumulative impact of fiscal and monetary measures was yet to be realised fully, the RBI Governor said tariff-related uncertainties were still evolving.

“There is elevated uncertainty on the external front. In view of these factors, even though there is policy space to further cut the policy rate, I feel this is not the opportune time for the same as it will not have the desirable impact,” he pointed out.

“Therefore, I vote to keep the policy repo rate unchanged at 5.50%. The intent of policy, nevertheless, is to continue to facilitate growth-enabling conditions. Some of the regulatory measures announced today will also be supportive of this objective,” he emphasised.

He also preferred to retain the neutral stance as any change to an accommodative stance at this stage, as suggested by some members, would tantamount to giving a definitive forward guidance about the future trajectory of the policy rate.

“The policy uncertainty, rapidly evolving developments and the foggy outlook suggest that we exercise caution and take a view for each policy as per the then prevailing macroeconomic conditions and outlook,” he concluded.