India within striking distance of 8% GDP growth, resilience not accidental: Shaktikanta Das

New Delhi: India is within striking distance of 8% gross domestic product (GDP) growth, and a leap towards Viksit Bharat 2047 is within the realm of realisation, said Shaktikanta Das, Principal Secretary-2 to the Prime Minister.

Addressing the Kautilya Economic Conclave on Sunday, he said: “India’s resilience is not accidental; it is the outcome of broad and mutually reinforcing reforms” and highlighted five major areas — AI, deepening of the financial sector, strategic atmanirbharta, sustainable development and human capital — where the pace of activity will be significantly enhanced.

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Das noted that the current global economic situation is marked by wars, fragmentation, unilateralism, tech blockades, energy price volatility and rising inflation.

“The interplay of these forces is creating uncertainty across the world and would stifle global growth,” he said, adding that what is likely to follow is restrictive monetary policy by central banks.

Even more critical are high public debt levels in many advanced economies, resulting in rising bond yields, lower fiscal space and a reduced ability of countries to counter current and future shocks, he cautioned.

However, despite such a challenging environment, India’s real GDP grew 7.8% in the first quarter of FY27, supported by strong domestic demand and investment conditions.

He listed strengthening governance and state capacity, building macroeconomic stability and investing in long-term productive capacity as the three factors behind India’s resilience.

“A distinguishing feature of India’s development journey in the last twelve years has been the gradual creation of governance foundations before the crisis actually emerged,” he said, adding that these include strengthening governance and state capacity, building macroeconomic stability through measures including flexible inflation targeting, fiscal prudence and better quality of expenditure, tax reforms and market integration, restoration of the health of the financial sector, as well as prudent management of the external sector.

Other measures include building India’s resilience through investment in long-term productive capacity and diversifying energy sources. “India is better positioned to withstand shocks,” he said, noting that India now stands at a pivotal moment in its developmental journey.

Referring to India’s big thrust on infrastructure spending and structural reforms over the last decade, he said India’s policy emphasis on fiscal consolidation and sustainable debt may be seen in this context.

“Many of the reforms undertaken over the past decade were not designed as one-off measures, but as strategic buffers to enable the economy to absorb disruptions and recover rapidly,” Das said, and put flexible inflation targeting, the introduction of GST, the big push for digital payments and banking reforms, among others, in this category.

Over the past decade, improvements in public infrastructure, financial inclusion, housing, household electrification, sanitation, digital services and welfare delivery have contributed to stronger citizen-state engagement.

“When citizens experience tangible improvements in their lives, confidence in institutions increase. This confidence becomes a critical resource for governments seeking to undertake difficult reforms,” he said.

A significant dimension of India’s recent development journey has been its success in extending the reach of governance, economic opportunity and public services to certain regions that had long remained on the margins of growth due to left-wing extremism and terrorism.

According to Das, the adoption of Flexible Inflation Targeting (FIT) in 2016 enabled India to navigate the successive shocks of Covid-19, the war in Ukraine and the current conflicts in West Asia, and has provided the bedrock for India’s high growth.

In fiscal policy, the government has shown sustained commitment to fiscal consolidation and reduction of the fiscal deficit without compromising on growth-inducing expenditure, he said.

“India’s external sector indicators have remained broadly resilient due to a mix of factors like the ongoing diversification of exports, conclusion of free trade agreements (FTAs), sustained surplus in services trade and steady inward remittances,” Das explained.

3-pronged approach

On being asked if something special was required to address the present shocks, he said: “There can never be a moment where you can say that whatever I have done is sufficient. There is always something more to do but in the current context, the emphasis has been to build our domestic capacity, domestic competence in areas where we are largely import dependent”.

He said the government is now focusing on such areas, whether energy, fertilisers or others.

“Apart from that, the focus of the government is also on areas, to take measures and to develop long-term capacity in areas where again we are dependent on sort of imports,” he said.

Citing the example of rare earth permanent magnets, when “it became a major problem because China had imposed certain restrictions for whatever reason they know better”, he said it was a problem for almost the whole world because nearly 80-90% of the rare earth magnet supply and the entire ecosystem originate in China.

“So, central government came out immediately thereafter with a major initiative to develop domestic capacity in rare earth permanent magnets because that is one critical component on which manufacture of you know automobiles, automobile manufacturing, electronic hardware manufacturing, and so much other manufacturing depends,” he said.

Das emphasised continuing with structural reforms, completing the remaining reform agenda, developing domestic capabilities in areas where the country is largely dependent on imports and maintaining a continuous focus on stability.

“Stability consisting of fiscal, monetary, and overall. Macroeconomic and macro financial stability, because that provides the bedrock that supports long-term growth. So broadly, I would say this is the approach the government is taking,” he said.

Way ahead

To capitalise on emerging opportunities in the journey ahead, Das said in his address that India needs to take further measures, including harnessing artificial intelligence, bringing in long-term finance and patient capital, pursuing strategic self-reliance and sustainable development, and harnessing human capital.

“As we advance towards Viksit Bharat 2047, sustaining the reform momentum is very critical,” Das said, adding that India’s strategy is no longer simply to grow rapidly but to grow sustainably and resiliently over the long term.

While India's financial ecosystem has evolved significantly, the next phase of growth will require strengthening long-term finance and patient capital, further deepening corporate bond markets, pension and insurance funds, municipal finance, innovative infrastructure financing, and markets for green and transition finance.

“Atmanirbharta (self reliance) does not imply isolation. Rather, it stands for building stronger domestic capabilities while remaining integrated with global markets and concluding more FTAs,” he said.

Das said efforts are now focused on enhancing India’s presence in global supply chains, strategic manufacturing, defence production and the domestic development of critical technologies.

In energy, he said the next phase of growth will be driven by initiatives such as the National Green Hydrogen Mission, electric mobility, energy-efficient infrastructure, sustainable agriculture and circular economy practices.