Skip to main content

GDP growth likely to improve to 6.2 percent in Q2 Ficci

By
GDP growth likely to improve to 6.2 percent in Q2 Ficci
India's GDP growth rate is expected to rise to 6.2 per cent in the second quarter of the current fiscal as the adverse impact of demonetisation and GST appears to be bottoming out, Ficci's latest Economic Outlook Survey said on Monday.
The growth rate had dipped to a 3-year low of 5.7 per cent in the April-June quarter of 2017-18.
The Central Statistics Office (CSO) is scheduled to release the economic growth data for the July-September quarter on November 30.
The economists participating in the survey also mentioned that the government should continue with its emphasis on productive capital investments in the social and physical infrastructure space even if this requires some calibration of the fiscal deficit target, the industry body said.
The projected fiscal deficit number for the current financial year is likely to be slightly higher at 3.3 per cent of the GDP in the current fiscal as against the government's target of 3.2 per cent, it said.
GDP growth is expected to improve to 6.2 per cent in July -September period of 2017-18 and further improve to to 6.7 per cent in the third quarter.
"The slowdown in the economy due to demonetisation and the adjustment impact of GST implementation seems to be bottoming out and as the new indirect tax regime stabilises, the economy would see an improvement in its performance," it said.
Even as these steps are taken by the government, the economists participating in the survey emphasised that reviving consumption, particularly in the rural and semi-urban areas, will be important to give a boost to overall demand in the economy.
The survey also indicated that the wholesale price based inflation for 2017-18 is likely to be around 2.8 per cent, although retail inflation would be a bit higher at 3.4 per cent.
"Given this outlook and the fact that supply side issues are largely responsible for the inflation movement in case of India, some of the economists mentioned that inflation targeting by the central bank may not be the correct approach," the survey said.
Ficci further said that it was also suggested that RBI can undertake a reassessment of various loan rates and other ratios based on their historical trends and corresponding economic impact to identify a possible way of promoting credit take-off across various sectors.
As per the survey, most of the economists felt that linking the pricing of loans to an external benchmark will make the monetary transmission mechanism more effective.
The Business Standard, New Delhi, 28th November 2017

Comments

Post a Comment

Popular posts from this blog

Govt’s gamble on GST cuts: What do the bond and currency markets signal?

By
  It’s not just humans who suffer from cognitive biases; markets do too. Interestingly, different financial markets exhibit distinct biases, each interpreting events through its own prism of prejudice. Take the recent announcements on GST reforms: equity markets have chosen to view them through the lens of growth, while bond and currency markets are focusing on potential macroeconomic risks—fiscal pressures and current account challenges. So, which lens captures the true pulse?Equity markets may be right in expecting GST reforms to revive consumption, which has remained lacklustre for a while. But the key question remains—will this revival come at the cost of broader macro stability?It is well known that consumption stocks have rallied since the GST rationalisation announcement. But what about bond markets? What signals are they sending since this rejig was announced from the ramparts of the Red Fort?The signs aren't encouraging. Bond prices have slumped and yields have surged sinc...
Post a Comment
Read more

Luxury carmakers urge clarity on GST rates to boost festive season sales

By
  A clear picture regarding new GST rates at the earliest will help the overall auto industry, including the luxury car segment, to regain momentum in the ongoing quarter, which generally sees enhanced sales on account of the festive season.The high-powered GST Council, chaired by Finance Minister Nirmala Sitharaman, will meet on September 3-4 to discuss moving to a two-slab taxation.In an interaction with PTI, BMW Group India President and CEO Hardeep Singh Brar said the recent speculation about the change in GST rates has caused uncertainty in the minds of consumers.Consumer interest and demand is strong, but they (prospective buyers) have adopted a wait-and-watch approach, and this delayed decision-making is impacting new vehicle sales at a certain level, he noted."Expediting clarity on GST rates is essential to get back to speed and ensure the auto sector's contribution to economic growth during this quarter is robust," Brar stated.He also hoped that the sustainable p...
Post a Comment
Read more

Sebi proposes tighter norms for green bond third-party reviewers

By
  Sebi on Friday said it has proposed to tighten the norms to appoint independent third-party reviewers or certifiers for green debt securities to align them with requirements for other ESG-linked bonds.In a draft circular, Sebi said that the current norms for green bonds, introduced in February 2023, lack detailed requirements around reviewer independence, conflict of interest mitigation, and disclosure standards that are now in place for other ESG-linked securities under a June 2025 circular.The regulator's latest proposal seeks public comments on a revised framework that would bring parity by incorporating comprehensive criteria for third-party certifiers of green bonds on non-convertible securities.Under the proposed norms, issuers of green debt securities will need to appoint reviewers who are independent of their management, directors, and key managerial personnel. These reviewers will be remunerated in a way that prevents any conflicts of interest and possess relevant expert...
Post a Comment
Read more