Mumbai : Indian economy is likely to grow at 7.9 per cent in the current fiscal provided the country receives normal monsoon as it will boost agriculture growth and lift rural demand, says a report.
As per the rating agency Crisil’s latest report, GDP is expected to grow by 7.9 per cent in 2016-17 as against 7.6 per cent in the previous fiscal if “monsoon is normal and global situation does not deteriorate from here”.
“If the rains are normal, it would give agriculture a one-time growth kick, particularly given the low-base effect of the two previous years… that should lift sagging rural demand and by extension, overall GDP growth,” it said.
Accordingly, the rating agency expects the Reserve Bank of India to continue its accommodative monetary stance and cut the repo rate by another 25 bps this fiscal.
Noting that the economy’s modest recovery has been shaped by “good luck” on crude oil and commodities, Crisil said the medium-term outlook will be shaped by progress on initiatives, such as cleaning up of bank balancesheets and successful implementation of the GST.
