India to outpace global economies with 6.5% growth in FY26
What's the story
India is set to retain its status as the world's fastest-growing major economy in FY26, according to the Reserve Bank of India's (RBI) annual report. The report projects a growth rate of 6.5% for the Indian economy during this period. The central bank attributes this optimistic outlook to strong macroeconomic fundamentals, a resilient financial sector, and a commitment to sustainable growth practices.
Financial growth
RBI's balance sheet and record dividend
The RBI's balance sheet grew by 8.2% in FY25, reaching ₹76.25 lakh crore on March 31, 2025. This expansion allowed the central bank to declare a record dividend of ₹2.69 lakh crore to the Narendra Modi-led central government. The growth on the asset side was mainly due to a massive rise in gold holdings (52.09%), domestic investments (14.32%), and foreign investments (1.7%).
Financial performance
RBI's income and expenditure increase
The RBI's income increased by 22.77% during the fiscal year, while its expenditure rose by 7.76%. The overall surplus stood at ₹2.68 lakh crore, a 27.37% increase from last year's ₹2.1 lakh crore. On the liabilities side, growth was driven by an increase in currency notes issued (6.03%), revaluation accounts (17.32%), and other liabilities (23.31%).
Asset distribution
RBI's asset composition and contingency fund transfer
As of March 31, 2025, domestic assets accounted for 25.73% of total assets. Foreign currency assets, gold (including gold deposits and holdings in India), and loans/advances to financial institutions abroad made up 74.27%. The RBI also transferred ₹44,861 crore to its Contingency Fund during this period.