Reserve Bank of India (RBI) Governor Shaktikanta Das said that consumption will drive economic revival going forward and the central bank does not want to surprise markets with a sudden rate hike, amid concerns surrounding inflation.
"All our actions will be calibrated, they will be well-timed and cautious. We don't want to give any sudden shock or any sudden surprises to the markets," he said in an interaction with CNBC.
He further said that there is a gap in capacity utilisation in India. There is slack in the economy but he added that he doesn't see any sign of stagflation in the country.
"Many SME players have already purchased restructuring package and RBI doesn't control supply-side factor in inflation. The revival process of the economy was far stronger from January to March. Capacity utilisation at the moment is nowhere near pre-pandemic levels," Shaktikanta Das said.
He, however, added that the Monetary Policy Committee could consider a change in course once economic activity shows signs of durability.
He further said that he estimates GDP growth for the current year at 9.5 percent and Q1 growth has been at 21 percent.
"Economic activity has gained momentum in Q1. We do see a revival of activity in various sectors now. RBI and MPC's effort has been to reduce rates and create congenial financial conditions. We have taken around 100 measures since Match 2021 to mitigate the impact of COVID-19," Das added.