Study Material | Test Series
Drishti IAS
call1800-121-6260 / 011-47532596
Drishti The Vision Foundation
(A unit of VDK Eduventures Pvt. Ltd.)
mains Test Series 2018
India to Grow 7.9% in this Financial Year
Apr 16, 2015

According to Foreign brokerage Morgan Stanley, the Indian economy will grow at 7.9 per cent this fiscal and 8.4 per cent in financial year (FY) 2016-17, on the back of policy reforms, spurt in domestic demand and lower inflation. 

The government’s determined efforts to implement policy actions to improve the growth mix, i.e. reviving productive investment and cutting back less effective redistributive policies, are helping the economy move towards the path of faster growth and lower inflation.

  • Under the new growth computation methodology, the GDP expansion at market prices will go up to 7.9 per cent in FY2015-16 and accelerate further to 8.4 per cent in FY 2016-17.

  • The risks to the growth forecasts are evenly balanced.

  • The pace of policy actions to revive productivity dynamic, strength of external demand recovery and trend in capital inflows into emerging markets are the key factors to monitor.

  • India recently switched to a newer system of GDP growth computation, which made it the fastest growing major economy in the world.

  • Under the older series of growth, its FY 2016-17 growth estimate remains unchanged at 6.5 per cent.

  • The government has initiated a slew of reforms like opening up the defence sector for private and foreign investments, increasing foreign ownership caps in insurance etc. to step up the growth.

  • Inflation has also been trending below 5.5 per cent, well within the RBI's targets.

  • The government and RBI have also agreed on an inflation targeting framework, which will make the monetary policy more predictable.

  • The government is expecting a GDP growth of 8-8.5 per cent and clock double-digit level in the subsequent years.

It is to be noted that presenting the Budget for 2015-16 Finance Minister Arun Jaitley had said “Growth in 2015-16 is expected to be between 8-8.5 per cent. Aiming for a double digit rate seems feasible very soon.

 

 


Helpline Number : 87501 87501
To Subscribe Newsletter and Get Updates.

http://www.drishtiias.com/upsc-current-affairs-article-India-to-Grow-7.9-in-this-Financial-Year