Manufacturing companies expected to benefit from lower input costs says RBI Governor according to latest policy meeting minutes

RBI government Shaktikanta Das had noted in the last monetary policy meeting that the global economy continues to grow at a steady pace, with trade remaining resilient. Despite its uneven progress, headline inflation is softening. According to the minutes of the meeting, Das noted that divergent growth-inflation trajectories across countries have led to varying monetary policy responses from central banks. In India, high frequency indicators suggest that economic activity remained steady during Q2:2024-25. Agricultural activity has significantly picked up due to a good south-west monsoon. This will contribute to both supply and demand side factors behind GDP growth. Manufacturing companies are expected to benefit from lower input costs. Services activity retains its buoyancy. He had opined that at this stage of the economic cycle, having come so far, we cannot risk another bout of inflation. The best approach now would be to remain flexible and wait for more evidence of inflation aligning durably with the target.