The upward revision of the GDP growth projection for 2025–26 to 7.3 per cent from the earlier 6.8 per cent underscores the RBI’s optimism.
"The decision to cut rates while keeping the door open for future easing helps buffer the economy against potential unexpected shocks or external headwinds," Setty said.
The move reinforces the structural drivers of a “higher-for-longer” growth trajectory, spanning investment, credit, and consumption, he added.
The RBI, in its December Monetary Policy, reduced the repo rate by 25 basis points to 5.25 per cent from 5.5 per cent earlier to give a boost to the thriving economy this fiscal.
The central bank noted that the surge in economic growth to 8.2 per cent in the second quarter of the current financial year and the sharp decline in inflation to 1.7 per cent had provided a rare “Goldilocks period” for the Indian economy.
Meanwhile, according to the SBI Chairman, concurrent liquidity-management measures are intended to anchor money-market rates and lower borrowing costs.
"Together, the rate cut, neutral stance, and targeted liquidity interventions aim to sustain economic momentum while safeguarding price and financial stability,” Setty noted.
SBI Research has predicted that India would grow at a rate of over 7 per cent in the remaining two quarters (Q3 and Q4), and the overall FY26 growth would be at 7.6 per cent.
"After GST rationalisation, amid festive spending, rural demand remained robust and urban demand is recovering. We expect more than 7 per cent Q3FY26 and Q4FY26 GDP growth with full year growth of 7.6 per cent," said the report.
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