Indian economy to grow at 7.4% this year, FICCI Survey finds

Prime Minister Narendra Modi being seen off on his departure from Colombo, Sri Lanka on May 12, 2017. Image Source: IANS

KEY HIGHLIGHTS:
1. Indian economy to grow between 7% to 7.6% this year.
2. Agricultural sector is estimated to growth at 3.5% in 2017-18
3. Majority of economists surveyed supported Universal Basic Income

Industry body FICCI's latest Economic Outlook Survey has pinned India's GDP (Gross Domestic Product) growth at 7.4% for the financial year 2017-18.

FICCI said, "The latest round of FICCI’s Economic Outlook Survey, conducted during March & April 2017, puts forth a median GDP growth forecast of 7.4% for the fiscal year 2017-18, with a minimum and maximum level of 7.0% and 7.6% respectively."

The pick-up in overall GDP growth will be supported by an improvement in industry and services sector growth.

"The industry and services sector are expected to grow by 6.9% and 8.4% respectively in 2017-18," FICCI said.

In April, the International Monetary Fund (IMF) held its GDP growth trajectory for India at 7.2%.

The IMF said that the impact of demonetisation was ‘yet to be thoroughly ascertained.’

The Central Statistical Organisation (CSO) in its estimates for GDP said that the economy grew at 7.0% despite demonetisation which had a ‘nominal’ impact on those numbers.

"The latest agricultural data reveals highest production of pulses in the country in the year 2016-17. It was pointed out that since India’s macroeconomic fundamentals were strong the economy was able to withstand the impact of the sudden demonetization move. The setback was transient and the economy is gradually picking up momentum as the process of remonetisation gets complete,” FICCI said.

FICCI said that there would be an uptick in the agricultural sector as well as confidence level of businesses.

“The median growth forecast for IIP has been put at 3.0% for the year 2017-18, with a minimum and maximum range of 1.5% and 6.8% respectively,” FICCI said.

With regard to inflation the industry body said that Wholesale Price Inflation (WPI) would be projected at 5% while Consumer Price Inflation (CPI) would be at 4.8%.

The fourth quarter of FY17, whose GDP numbers will be released this month, FICCI said would lie between 6.6- 7.1%.