India can certainly achieve over 7% growth rate and the nation should aspire for that, RBI Governor Sanjay Malhotra on Friday said.

“I would like to stick my neck out and say that, certainly India can achieve a 7% and plus growth rate. We should certainly aspire for that,” Malhotra said in his first post-policy press briefing when asked whether there was a possibility of the Indian economy growing at a faster pace.

The Reserve Bank  of India (RBI) in its bi-monthly monetary policy has projected 6.7% growth for FY26, up from 6.4% estimated for the current fiscal.

The RBI has, however, cut the GDP growth forecast for the first two quarters of the next financial year. 

In Q1 of FY26, the GDP growth is pegged at 6.7%, down from the earlier forecast of 6.9%. For Q2, the forecast has been brought down to 7% from 7.3% earlier. The growth for the last two quarters is  projected same at 6.5%. 

Malhotra said new forecasts have factored in the impact of the weaker rupee. 

The RBI expects tax cuts in the budget would lead to a recovery in consumer spending and private investment would also pick up. 

Commenting on the budget proposals of Finance Minister Nirmala Sitharaman, the RBI Governor said the income tax relief will not fuel inflation but would support growth.

Sitharaman announced an increase in the personal income tax threshold to Rs 12 lakh, below which taxpayers owe no tax, up from Rs 7 lakh, as well as a rejig in tax brackets that would help those earning higher than that save up to Rs 1.1 lakh.

The reduction in tax rates will benefit one crore taxpayers.

Malhotra further said that the Union Budget 2025-26 is ‘excellent’ from both growth as well as inflation point of view.