After effects of Demonetisation and goods and services tax (GST), the Indian economy is screened to grow at its fastest pace in three years in the current fiscal 2018-19. The government said that India will retain its position as the world’s fastest growing economy. Gross domestic product (GDP) is expected to grow by 7.2 per cent, up from 6.7 per cent previous year.
The growth of Gross value added (GVA) is seen at 7 per cent against 6.5 per cent previous year, according to the first, full-fiscal-year estimate released by the Central Statistics Office (CSO) recently.
The growth number seems realistic and may not a revision as it fairly reflects the present situation, DK Joshi, chief economist at rating agency Crisil, quoted.
The Indian economy grew 7.6 per cent in the first half of the fiscal, suggesting a moderation in the second half with liquidity constraints and high crude prices a drag in the third quarter. Growth had declined to a below-expectation 7.1 per cent in the second quarter from 8.2 per cent in the first quarter.
The forecast is a bit lower than 7.4 per cent estimated by the Reserve Bank of India (RBI). The International Monetary Fund (IMF) has forecast 7.3 per cent growth in the current fiscal and 7.4 per cent in the year after.
The higher economic growth rides on a strong recovery in investments. Gross fixed capital formation is up 12.2 per cent this fiscal against 7.6 per cent in the last.
Private consumption is forecast to slow to 6.4 per cent rise this fiscal from 6.6 per cent in the last. Government consumption is also moderately lower at a 9.2 per cent rise this fiscal against 10.9 per cent in the last.
CSO sees manufacturing sector growth at 8.3 per cent compared with 5.7 per cent a year ago. Farm sector growth is projected at 3.8 per cent, slightly ahead of 3.4 per cent last fiscal.
– Apparel and Textile News, Apparel Talk, Indian Apparel
