Economic growth projection kept unchanged at 7.4% for FY16: RBI

RBI says that the outlook for agriculture is subdued, in view of both rabi and kharif prospects being hit by monsoon vagaries.

RBI Governor Raghuram Rajan says that  Economic growth Projection kept unchanged at 7.4% for FY16.

RBI says that the outlook for agriculture is subdued, in view of both rabi and kharif prospects being hit by monsoon vagaries. While there are areas of robust growth in manufacturing such as capital goods and passenger cars, weak rural and external demand holds back stronger overall growth. Similarly, while prospects for a revival in service sector activity have been boosted by optimism on new business, pockets of lacklustre activity such as construction weigh on the overall outlook. 

The step-up in public capital spending and the easing stance of monetary policy provide the enabling environment for a revival in private investment demand, supported by easing input prices and improving conditions for doing business. The growth projection for 2015-16 has accordingly been kept unchanged at 7.4 per cent with a mild downside bias.