to being an exclusive deposit insurance system. 5. over nearly 50 years, the dicgc has evolved and moved up the value chain – learning by doing as it were – and met many challenges along the way. by far the biggest challenge came in 2001 when a large co - operative bank in the state of gujarat was in trouble. since several banks, particularly many small co - operative banks, had exposure to this bank, its failure had the potential to precipitate a crisis in the banking industry. the government and the reserve bank put in place resolution of this bank through a restructuring programme. the key element of this programme was proactive action by the dicgc towards prompt payment of claims to the depositors of the bank. this action by dicgc ensured that panic did not spread. global crisis and deposit insurance 6. let me now turn to the recent financial crisis. though the crisis impacted the entire world, it affected different countries in different ways. after the collapse of lehman brothers in mid - september 2008, there was an abrupt breakdown of trust, which spread rapidly from the united states to other advanced economies, causing financial markets in all advanced economies go into seizure. suddenly, there was a great deal of uncertainty about the extent of losses, the ability of banks to withstand those losses, the extent of risk in the system, where it lay and how it might explode. this uncertainty triggered unprecedented panic and almost totally paralyzed the entire chain of financial intermediation. banks hoarded liquidity. credit, bond and equity markets nearly froze. several venerable financial institutions came to the brink of collapse. massive deleveraging drove down asset prices setting off a vicious cycle. in such a situation, governments and regulators had to take extraordinary measures in a big way. 7. not surprisingly, deposit insurance emerged as the most visible part of the financial safety - net in arresting a panic reaction. several deposit insurance systems increased their insurance coverage limits ; in some cases the governments extended blanket deposit guarantee. these measures went a long way in restoring public confidence in the banking system in economies where it came under serious threat. global crisis and india ’ s response 8. that india was hit by the crisis dismayed many people. in the years before the crisis, the decoupling theory gained intellectual ascendancy. this theory held that even if advanced economies went into a downturn, emerging market economies would not be affected because of their improved policy framework, robust foreign exchange reserves, and sound banking systems. the

core inflation that excludes food and fuel and is most amenable to monetary policy has fallen to its lowest level ever. the rbi has anchored expectations by remaining committed to aligning inflation with the target and regards the recent easing of price pressures as work in progress. it projects inflation to average 4. 5 per cent in 2024 - 25 and 4. 1 per cent in 2025 - 26. the taming of inflation lays the foundations of sustained high growth in the future by improving consumption conditions, the investment outlook and external competitiveness. alongside macroeconomic stability, financial stability is getting reinforced by prudent financial policies and active on - site supervision complemented with off - site surveillance, which harnesses suptech, big data analytics and cyber security drills. india's financial sector is predominantly bank - based. gross non - performing assets ( gnpas ) in the banking system have steadily fallen from their peak in march 2018 to 2. 8 per cent of total assets by march 2024. adjusted for provisions, net npas are just 0. 6 per cent. capital and liquidity buffers are well above the regulatory norms. profitability is high and this virtuous circle has supported a credit upswing. stress tests for credit risk and interest rate risk reveal that banks would remain above minimum capital requirements even under severe stress scenarios. similar improvements are evident among nonbanking financial companies. the rising strength and resilience of the financial sector augurs well for medium - term growth prospects as it is the financial sector which intermediates the resource requirements of the growth process. another aspect of macroeconomic stability is the ongoing fiscal consolidation. as a result, the general government debt which is estimated at 81. 6 per cent of gdp at the 4 / 8 bis - central bankers'speeches end of march 2024 is expected to decline to 78. 2 per cent by end of this decade by the imf. our projections show that if expenditures are increased on reskilling / upskilling the labour force in the most productive sectors of manufacturing, investing in digitalisation and promoting energy efficiency, the general government debt will fall even further to 73. 4 per cent of gdp by 2030 - 312. this is significant in the context of the imf's projections that show the debt ratio as projected to rise to 116. 3 per cent in 2028 for advanced economies and to 78. 1 per cent for emerging and middle - income countries. a potent growth accelerator emerges from india '