Indian economy continues to grow at a strong pace, supported by robust domestic demand, prudent macroeconomic policies: RBI
- IBEF
- January 2, 2026
India’s economic momentum remains strong, underpinned by robust domestic demand, moderate inflation, and prudent macroeconomic management, according to the Reserve Bank of India’s latest Financial Stability Report. The central bank noted that the country’s financial system remains resilient, supported by strong balance sheets, accommodative financial conditions, and low market volatility. Scheduled commercial banks continue to demonstrate sound financial health, backed by strong capital and liquidity buffers, improving asset quality, and healthy profitability. Non-banking financial companies are also maintaining stability with robust earnings and strengthening asset profiles, while the insurance sector remains secure with solvency ratios comfortably above regulatory thresholds. The report also highlighted that the global economy, too, has shown resilience, aided by fiscal support and rapid technological progress, including advances in artificial intelligence.
According to this report, household debt in India rose to 41.3% of GDP as of 2025 (Mar), primarily due to increased consumption-based debt. However, the report noted that while India has some of the lowest Household Indebtedness among its peer LMEs, it remains at a comparatively low level. As a result of the measures taken by the Reserve Bank of India (RBI), the Financial Stability Report has confirmed that the Indian financial system remains strong and stable. The report also indicated that the Reserve Bank of India (RBI) is pursuing a gradual policy to promote sustainable economic growth and maintain macroeconomic stability.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.
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