C Rangarajan, chairman, Prime Minister's Economic Advisory Council tells Business Standard that the measures taken by the government will lead to economic growth of at least 6 per cent in FY14 against a decadal-low growth of 5 per cent in FY13.
Fitch Solutions sees RBI keeping benchmark interest rates unchanged during the fiscal to March 2022 following its decision to buy Rs 1 lakh crore of government bonds. "We had initially expected another policy rate cut to arrest the rise in government bond yields since the Union Budget announcement in February. "However, having an explicit bond purchase guidance from the RBI following the announcement of the G-SAP will also achieve a similar effect, if not even be more effective than a rate cut on capping the increase in bond yields," it said in a note. The Reserve Bank of India (RBI) held its policy repurchase (repo) rate unchanged at 4 per cent at its monetary policy meeting on April 7.
Beside manufacturing, deceleration was also witnessed in sectors like agriculture, construction and electricity, gas and water supply.
India Ratings and Research on Friday revised down India's FY22 real GDP growth forecast to 10.1 per cent, from earlier projection of 10.4 per cent, citing the second wave of COVID-19 infections and slower pace of vaccination. At a time when large parts of the country are experiencing tremendous pressure on medical infrastructure, the agency said it expects the second wave to start subsiding by mid-May. Earlier this month, the Reserve Bank maintained its 10.5 per cent GDP growth estimate, but Governor Shaktikanta Das has flagged the rising cases as the biggest impediment to recovery.
'Our preference remains for the less-expensive industrial stocks, which are showing good earnings momentum.'
Yes. Whilst public expenditure is kicking in, the key reason is the decline in private investment
Though it is likely gross domestic capital formation increased in the quarter ended June, against declines in the previous two quarters, a significant revival in investment might take a few quarters more, economists say.
At the same time, the UN said in a report, the performance of private investment remains a key macroeconomic concern.
'Election years tend to see high government expenditure on unproductive schemes, though that money sloshing around can boost private consumption.' 'Again, it can mean higher inflation,' explains Devangshu Datta.
Chief Economic Adviser K V Subramanian on Monday said the overall impact of the second wave of COVID-19 on the country's economy is not likely to be large but cautioned about an uncertainty surrounding the pandemic going ahead. He further said that given the circumstances due to the pandemic, it is difficult to forecast if the country would achieve a double digit growth in the current fiscal. The Economic Survey 2020-21 released in January this year had projected GDP growth of 11 per cent during the current financial year ending March 2022.
Many analysts argue with limited space for a fiscal stimulus, the burden of lifting growth lies squarely on monetary policy.
Growth is going to be an important factor in contributing high tax revenue and in containing the fiscal deficit.
India is only on the starting block.
The CSO estimate is, however, a bit lower than 7.4 per cent growth projected by the Reserve Bank for the current fiscal.
'We will have to wait for one more year to cross the 7% mark, which should be possible in the absence of any disruptive reform,' points out CARE Ratings Chief Economist Madan Sabnavis.
Index of industrial production data had also shown that the sector grew at 3.1 per cent after contracting in the previous quarters.
Fresh investments are constrained by tepid demand.
This time there has been a rather peculiar criticism of the latest GDP numbers.
The economic activities that registered growth of over 6 per cent in the second quarter are manufacturing, electricity, gas, water supply, other utility services and trade, hotels, transport and communication, and services related to broadcasting.
India's GDP is estimated to contract by a record 7.7 per cent during 2020-21 as the COVID-19 pandemic severely hit the key manufacturing and services segments, as per government projections released on Thursday. Amid overall decline in economic activities, some respite was provided by the agriculture sector and utility services like power and gas supply, which have been projected to post positive growth during the current fiscal ending March 2021.
After contracting for two quarters in a row, the Indian economy entered the positive territory with a growth of 0.4 per cent in the October-December quarter, mainly due to good performance by farm, services and construction sectors, official data showed on Friday. Trade and hotel industry registered a contraction of 7.7 per cent during the third quarter this fiscal, as the sectors continued to suffer on account of coronavirus pandemic. According to the data released by the National Statistical Office (NSO), the farm sector recorded a growth of 3.9 per cent, and the manufacturing sector output grew by 1.6 per cent in the quarter under review.
While India's GDP growth slowed to five-year low of 5.8% in Q4, China grew at 6.4%.
India's GDP had recorded 7.5 per cent growth in the April-June quarter of last fiscal.
The sad truth is that the debt-to-GDP ratio will shoot up close to 90 per cent in the coming year, and the fiscal deficit glide path does not promise to reduce it substantially any time soon, predicts Mihir S Sharma.
The Jammu and Kashmir administration is planning to set up India's best mythological theme park near the famous Vaishno Devi shrine in Reasi district and has sought investors for the project, officials said.
'Political parties bring out money they have stashed away and start spending it. How large that spending will be depends on how much money has been stashed. So, you are going to have a strong upside coming from the election effect,' says Pronab Sen.
While the likelihood of these states going the Lanka or Greece way may be an alarming assessment, the financial situation of some states such as Punjab and West Bengal is indeed quite weak.
The ED will probe if there were alleged irregularities in the formulation and execution of the Delhi Excise Policy unveiled in November last year.
India's growth slowed in three months through December from a revised 7.4% expansion in the previous quarter, but it was much stronger than expected.
With adoption of the new method the size of China's economy last year was about $130 billion larger than previously estimated.
India attracted an estimated $49 billion FDI in 2019, a 16 per cent increase from the $42 billion recorded in 2018.
RE of GDP for 2015-16 show that the economy grew 7.9% in 2015-16, rather than the earlier estimate of 7.6 per cent.
The size of the GDP in the second quarter of 2018-19 is estimated at Rs 33.98 lakh crore, as against Rs 31.72 lakh crore a year ago
The greatest disconnect lies in the estimates of industrial growth.
However, economic growth in five years of the UPA and NDA cannot be compared because of the now complex back series data, reports Indivjal Dhasmana.
Growth in the third quarter (October-December) is expected to be the weakest in years, with spending hit due to unavailability of enough replacement currency.
Slight recovery in growth is expected only in July-September.
While the finance minister had a great opportunity to come out with flying colours while presenting this last Budget of his government, he didn't, says Omkar Goswami.
While the positive surprise has been the high growth in agriculture, the negative surprise is in the trade, transport, hotels segment where growth came lower than expected, says Madan Sabnavis.
The bigger worry is that its effects could linger well into the next financial year.
