India's real gross domestic product (GDP) growth could have exceeded 8% without the external shocks experienced over the past three years, Reserve Bank of India (RBI) Deputy Governor Poonam Gupta said on Tuesday.
Speaking at a media summit, Gupta said India had maintained growth above 7% despite challenging global conditions.
She estimated that an improvement in the international environment could add another 50 basis points to one percentage point to economic growth.
Gupta attributed India's economic resilience to reforms and institutional improvements undertaken since 1991.
She highlighted the development of digital infrastructure, stronger economic systems and the growing contribution of states to national growth.
According to Gupta, these measures have created the foundation for sustained economic expansion.
However, she acknowledged that accelerating growth would require greater domestic investment, foreign direct investment and lessons from other economies.
She identified fuel prices and external financing as continuing challenges.
On food security, Gupta expressed confidence in India's ability to manage supply pressures despite El Nino-related weather concerns.
She said the country had strengthened its agricultural position and was increasingly capable of exporting food products.
Gupta also noted that policy adjustments had reduced the economy's vulnerability to disruptions such as oil price increases and deficient rainfall.
Gupta said fiscal policy could cushion the initial impact of supply shocks through targeted measures.
However, she emphasised that such interventions must remain consistent with fiscal discipline and macroeconomic stability.
She also highlighted the benefits of India's diversified economic structure, arguing that reduced dependence on individual sectors had improved resilience.
Addressing concerns about artificial intelligence replacing workers, Gupta expressed scepticism about widespread job losses.
She suggested that previous technological transformations had not resulted in permanent employment destruction and expected a similar outcome from artificial intelligence.
On government finances, Gupta said the relationship between borrowing costs and nominal GDP growth supported India's debt outlook.
She indicated that the government debt-to-GDP ratio could decline under normal economic conditions, provided existing trends continued.
