India set to retain fastest-growing major economy status in FY26: RBI

The Reserve Bank of India (RBI) in its annual report projected that the Indian economy is likely to maintain its position as the fastest-growing major economy in FY2025-26. The optimism is fueled by a pick-up in private consumption, robust bank and corporate balance sheets, supportive financial conditions, and a sustained push from the government on capital expenditure.

The central bank also painted a positive inflation outlook for the coming year, citing easing global supply chain pressures, a dip in commodity prices, and the prospect of a strong agricultural output driven by an above-normal southwest monsoon.

However, the RBI cautioned that financial markets may face intermittent volatility, particularly in response to global uncertainties like shifting trade tariff policies and rising geopolitical tensions.

On the financial front, the RBI?s balance sheet grew 8.20% year-on-year to Rs 76.25 lakh crore as of 31 March 2025. While income for the year increased by 22.77%, expenditure increased by 7.76%. The year ended with an overall surplus of Rs 2.68 lakh crore as against Rs 2.10 lakh crore in the previous year, resulting in an increase of 27.37%.

The asset side of the balance sheet saw increases in gold reserves, domestic investments, and foreign investments. Domestic assets accounted for 25.73% of total assets, while foreign currency assets, gold, and other holdings made up the remaining 74.27%.

On the liabilities side, the growth was attributed to a rise in currency in circulation, revaluation accounts, and other liabilities by 6.03%, 17.32% and 23.31%, respectively.

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