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The industry body -- Confederation of Indian Industry’s (CII) newly-elected President Sanjiv Bajaj has expressed optimism that the Reserve Bank of India's (RBI’s) decision to raise benchmark interest rates and the likelihood of a good monsoon will help in containing inflation. He said ‘I do believe that we are now in an era of higher interest rates. This will help us bring down inflation, at least a part of that going forward’. He said various factors combined with the hope of a strong monsoon ‘should put us in a better place’ by the second half of the year for policymakers to decide where inflation and interest rates move. Bajaj observed that the rise of inflation has two aspects - demand and supply side.

He said ‘RBI has already started the cycle of taking interest rates up and we should expect interest rates to continue moving up in the coming year. We would expect a clear direction from RBI on how they are going to address interest rates. Hopefully in the next monetary policy review we should be able to hear something to that extent from them.’ CII estimates India's GDP growth to be in the band of 7.4-8.2 percent, depending upon the global oil prices. He further explained ‘global headwinds and inflation will have to be countered with robust policy reforms, both domestic and external sector reforms, to unlock the growth potential of the economy.’

Sharing the vision for the economy, Bajaj said that India has the potential to become a $40 trillion economy by the time it turns 100, in 2047, with milestones at $5 trillion by 2026-27 and $9 trillion by 2030-31. Highlighting the sectoral drivers of growth, he elaborated that manufacturing and services will be the twin engines of growth. The enabling policies of the government, particularly the PLI scheme, are expected to push manufacturing sector's contribution in gross value addition to 27 percent by FY48. Similarly, services, too, will witness its share rising from 53 percent to 55 percent in the terminal year. The contribution of exports to GDP must rise while the investment rate must be stepped up.