News APP

NewsApp (Free)

Read news as it happens
Download NewsApp

Available on  gplay

This article was first published 9 years ago
Rediff.com  » Business » Economy likely to grow at 6.5% next fiscal

Economy likely to grow at 6.5% next fiscal

Source: PTI
January 15, 2015 16:46 IST
Get Rediff News in your Inbox:

Declining crude prices is a windfall gain for the Indian economy.

IndiaIndian economy is expected to grow at about 6.5 per cent in the next fiscal, on the back of a similar growth rate likely in the industrial sector during the period, ratings firm India Ratings & Research said on Thursday.

"India Ratings & Research (Ind-Ra) expects FY16 gross domestic product to grow 6.5 per cent based on its estimates that the industrial sector will grow 6.5 per cent," the ratings agency said.

In the current fiscal ending March 2015 (2014-15), the domestic economy is likely to grow at about 5.6 per cent and the industrial sector at 3.6 per cent, it said.

"The agency is of the view that a number of announcements made in the FY15 budget to address the structural issues plaguing industrial and infrastructure sector could gather pace in FY16 besides few more being announced in the forthcoming budget," it said in a statement.

Government’s push for Make in India which focuses on select 26 sectors and improving the 'ease of doing business' will aid the manufacturing/industrial growth, it added.

"We believe that the economic fundamentals are going to improve.

“When the Make in India gets rolling, the demand for raw materials is going to move up," said Devendra Kumar Pant, chief economist, Ind-Ra.

On inflation, it expects that both Wholesale Price Index and Consumer Price Index to moderate to 2.8 per cent and 6 per cent respectively in 2015-16.

In response to declining inflation and inflationary expectations, the Reserve Bank of India cut the repo rate by 0.25 per cent on Thursday.

"Ind-Ra expects RBI to cut the repo rate by another 75 basis points (0.75 per cent) by FY16.

“The moderation in inflation is based on the assumption of a normal rainfall in 2015, a moderate hike in procurement price, soft global commodity prices and near stable rupee-dollar exchange rate," it added.

Declining crude prices is a windfall gain for the Indian economy, said the agency, adding that it has improved both the inflation and fiscal outlook.

"As the bond market had already factored in the expected rate cut, the average 10-year government-security yield fell to 7.93 per cent in December 2014 from 8.75 per cent in August 2014.

“Ind-Ra expects it to fall in the range of 7.1-7.2 per cent by March 2016."

Get Rediff News in your Inbox:
Source: PTI© Copyright 2024 PTI. All rights reserved. Republication or redistribution of PTI content, including by framing or similar means, is expressly prohibited without the prior written consent.
 

Moneywiz Live!