NEW DELHI (Enmaeya News) — Sanjay Malhotra, India’s newly appointed central bank chief, is expected to adopt a growth-oriented monetary policy as he collaborates with Prime Minister Narendra Modi’s administration to revitalize the country’s slowing economy. Since assuming office in December, Malhotra has already reduced interest rates and delayed implementing certain banking regulations to enhance credit flow and stimulate economic activity.

India’s economy had previously surged to 8.2% growth in fiscal 2024, but recent declines have prompted concerns. In response, investors have pulled $22 billion out of Indian stocks since October, signaling unease in the market. The Reserve Bank of India (RBI) acknowledges the need for monetary measures to support growth, particularly as inflation starts to ease. Malhotra, known for his data-driven and transparent approach, has introduced key monetary interventions, including the largest tax reduction in a decade, announced by the Modi government. This tax reduction is aimed at boosting middle-class spending and avoiding a potential middle-income trap, helping sustain economic growth at higher levels.

Despite these efforts, experts remain cautious about the possibility of returning to past high growth rates. They warn that short-term measures, while helpful, could lead to inflationary pressures unless significant improvements are made on the supply side of the economy.