India's Expanding Supply Capacity: The Key to Inflationary Control

S&P Global Ratings notes India's rapid supply capacity growth aids in controlling inflation. Despite a 14-month inflation high, expectations remain anchored, with infrastructure and domestic consumption as growth drivers. Emphasizing workforce upskilling as AI and digitalization reshape the labor market, S&P stresses the importance of policy intervention.

S&P Global Ratings has indicated that India is witnessing a rapid expansion in its supply capacity, a factor crucial for containing inflationary pressures in the economy.

According to Vishrut Rana, Senior Economist for Asia Pacific at S&P, the Reserve Bank of India's monetary policies remain credible, even as the country grapples with inflation surpassing RBI's target band due to rising food prices.

With a strong domestic demand and infrastructure playing a vital role in growth, the future also hinges on workforce upskilling to tackle AI's impact on the labor market. Policy interventions are deemed essential to bridge this transition.

(With inputs from agencies.)