Revised numbers for FY17, FY18 show economy grew much faster

NEW DELHI: India’s economy expanded at a much faster rate than initially estimated in the last two fiscal years, according to revised numbers released by the government, which show that growth remained high despite disruptions from demonetisation and the rollout of goods and services tax.

The statistics office on Thursday revised the growth rate for India’s gross domestic product for fiscal 2017 to 8.2% from the 7.1% reported earlier. The government had announced demonetisation on November 8, 2016, partly impacting the fiscal year through March 2017.

The growth estimate for fiscal 2018, the first full year after demonetisation and which also included the first nine months of GST, was raised to 7.2% from 6.7% in the first revised estimates for FY18. The data indicate a sharper slowdown between the two years than estimated earlier.

The gap widened to a full percentage point from 0.4 percentage point earlier.

Growth for FY16 was revised down to 8% from the 8.2% estimated earlier, partly magnifying the growth for FY17, the best year of growth for the Narendra Modi government.

The revisions are likely to further politicise the country’s statics, as they show the BJP-led NDA widening the lead over the previous UPA regime in terms of growth. The average growth in the five years of the NDA works out to 7.6% against 6.7% for the UPA-2, as per the back-series growth data released earlier this year.

“There is an all-round upward revision across all sectors, led by agriculture,” said DK Joshi, chief economist at Crisil.

The statistics offices said the revision was on account of use of latest available data on agricultural and industrial production, government expenditure, and also more comprehensive numbers from source agencies like the Ministry of Corporate Affairs and Nabard.
Read the rest of this entry »


GDP growth likely to be tad higher at 7.5% in FY20, says India Ratings and Research

Source: The Economic Times, Jan 17, 2019

NEW DELHI: The country’s economy is likely to grow a tad higher at 7.5 per cent in 2019-20 on account of steady improvement in major sectors — industry and services, said India Ratings and Research (Ind-Ra) Thursday.

According to the advance estimates of the Central Statistics Office (CSO), the economy may clock a growth rate of 7.2 per cent in the current financial year, up from 6.7 per cent in the previous year.

Ind-Ra, a Fitch Group company, expects gross domestic product (GDP) growth to be a “tad higher” at 7.5 per cent in fiscal 2019-20.

After demonetisation and the GST implementation, the agency had expected 2018-19 to be a year of quick recovery and, indeed, the recovery has been sharp with GDP growth coming in at 7.2 per cent, it said.

It further said GDP growth would have been even better but for the global headwinds caused by an abrupt rise in crude oil prices and strengthening of the US dollar, among other factors.

“However, GDP growth in 2019-20 will be more dispersed and evenly balanced across sectors as well as demand-side growth drivers,” Ind-Ra said.

Over the past few years, private final consumption expenditure and government final consumption expenditure have been the primary growth drivers of Indian economic growth.

Ind-Ra said it believes that investments are slowly but steadily gaining traction, with gross fixed capital formation growing 12.2 per cent in the current fiscal and projected to clock 10.3 per cent in the next year.

“This is certainly a comforting development, but the flip side of this development is that it is primarily driven by the government capex (capital expenditure), as incremental private corporate capex has yet to revive” it said.

It further said that due to the slowdown in private corporate and household capex, GDP growth has failed to accelerate and sustain itself close to or in excess of 8 per cent.

India to grow at 7.2 per cent in 2018-19: Government

Source: The Economic Times, Jan 08, 2019

NEW DELHI: The Indian economy is expected to grow at 7.2 per cent in 2018-19, a tad higher from 6.7 per cent in the previous fiscal, mainly due to improvement in the performance of agriculture and manufacturing sectors, the Central Statistics Office said Monday.

Releasing the first advance estimates of National Income for 2018-19, the Central Statistics Office (CSO) said, “The growth in GDP during 2018-19 is estimated at 7.2 per cent as compared to the growth rate of 6.7 per cent in 2017-18.”

“Real GVA (Gross Value Added) is anticipated to grow at 7 per cent in the current fiscal as against 6.5 per cent in 2017-18,” it said.

According to the CSO data, the expansion in activities in ‘agriculture, forestry and fishing’ is likely to increase to 3.8 per cent in the current fiscal from 3.4 per cent in the preceding year.

The growth of manufacturing sector is expected to accelerate to 8.3 per cent this fiscal, up from 5.7 per cent in 2017-18.

The Gross Domestic Product (GDP) had expanded by 7.1 per cent in 2016-17 and 8.2 per cent in 2015-16.

Leaving bumps behind, GDP in fast lane ahead of polls

Source: The Economic Times, Jan 08, 2018

NEW DELHI: India’s economy is forecast to grow at its fastest pace in three years in FY19, recovering from the disruption caused by demonetisation and the rollout of the goods and services tax (GST), marking the end of the government’s five-year term on a positive note ahead of the general elections. India will thus retain its ranking as the world’s fastestgrowing economy, the government said.

Gross domestic product (GDP) is forecast to grow 7.2%, up from 6.7% last year, according to the first, full-fiscal-year estimate released by the Central Statistics Office (CSO). Gross value added (GVA) growth is seen at 7% against 6.5% last year, according to the data released on Monday. Read the rest of this entry »

Settled GST, credit flows among 7 reforms to aid India grow 7.5% in 2019: CII

Source: The Economic Times, Dec 31, 2018

NEW DELHI: A settled goods and services tax (GST), improving credit availability and capacity expansion from increasing investment in infrastructure are among seven key drivers that will help Indian economy grow 7.5% next year, said the Confederation of Indian Industry (CII).

In its ‘Growth Outlook for 2019’, CII said that amid growing global vulnerabilities of trade wars and US monetary tightening, India shines as the fastest growing major economy with robust gross domestic product (GDP) in 2018 that is expected to continue to expand in 2019.

“Better demand conditions, settled GST implementation, capacity expansion resulting from growing investments in infrastructure and continuing positive effects of the reform policies undertaken and improved credit offtake especially in services sector at 24% will sustain the robust GDP growth in the range of 7.5% in 2019,” CII said in a statement.

The positive outlook is supported by improved demand conditions arising from election spending, stronger services and infrastructure sector, it said.

The Reserve Bank of India (RBI) expects India’s economy to grow 7.4% in 2018-19.

CII had suggested only three slabs for GST – a standard rate, a higher rate for demerit goods and a lower rate for some mass consumption items – and inclusion of fuels, real estate, electricity and alcohol in the ambit of the levy.

The industry lobby has recommended that the RBI revisit lending restrictions on banks under the PCA (prompt and corrective action) and open a limited special liquidity window to meet emergencies of financial institutions including mutual funds to improve liquidity in the system.

It has also suggested digitisation of land records, online single window systems in states and enforcing contracts among measures to enhance ease of doing business.

India aims to feature among the top 50 countries in the World Bank’s ease of doing business index, on which it is currently ranked 77.

In its ‘Growth Outlook for 2019’, CII said that a “strong programme of infrastructure development” will provide growth impetus for downstream industry sectors and generate employment opportunities.

To strengthen agriculture produce marketing, it has suggested that all states implement the Agriculture Produce and Livestock Marketing Model Act. Besides, implementing e-NAM mandis will help promote inter-state trade, it said.

CII also said that additional benches of the National Company Law Tribunal will address the issue of non-performing assets.

It said that increasing domestic oil production, special window for oil marketing companies to procure oil and stepping up diplomacy with the US to continue oil purchases from Iran will help India guard against the risk of higher oil prices.

GDP growth likely to decelerate to 7.5-7.6% in Q2: Report

Source: The Hindu Business Line, Nov 26, 2018

New Delhi: The Gross Domestic Product (GDP) growth in the September quarter is expected to decelerate to 7.5-7.6 per cent over the previous three-month period mainly due to slowdown in rural demand, a State Bank of India (SBI) research report said Monday.

The GDP growth at constant prices (2011-12) was 8.2 per cent in the April-June quarter of 2018-19.

The Central Statistics Office (CSO) will be releasing the estimates for GDP growth for July-September on Friday.

The ‘SBI Ecowrap’ report said the SBI Composite Leading Indicator (CLI), a basket of 21 leading indicators for September quarter of the current fiscal, is showing a marginal declining trend.

Consequently, the headline second quarter Gross Value Added (GVA) growth could be 7.3-7.4 per cent, due to the slowing of rural demand, it said. Read the rest of this entry »

CAD may narrow to 2.6% of GDP in FY19 on falling oil prices, says report

Source: Business Standard, Nov 22, 2018

Mumbai: Following a decline in oil prices, the country’s current account deficit (CAD) is expected to touch 2.6 per cent of GDP in the current financial year against an earlier expectation of 2.8 per cent, a report said.

Fiscal deficit in the first half of FY19 has already reached 95.3 per cent of full-year budget estimates (BE).

Total receipts for the six months period is Rs 7.09 trillion (39 per cent of BE) and the total expenditure is estimated at Rs 13.04 trillion (53.4 per cent of BE).

“The recent decline in oil prices might compress the CAD by around $5-6 billion from our estimates of $78 billion. This will imply CAD settling down at 2.6 per cent of GDP (previously 2.8 per cent of GDP),” according to an SBI Research report.

The report earlier stated that CAD may touch 2.8 per cent of GDP in the current financial year on a surge in crude oil prices and moderate growth in exports. Read the rest of this entry »