RBI Governor Raghuram Rajan said that it expects economy to grow by 7.6%.
RBI Governor Raghuram Rajan said that it expects economy to grow by 7.6% in FY17.
The uneven recovery in growth in 2015-16 is likely to strengthen gradually into 2016-17, assuming a normal monsoon, the likely boost to consumption demand from the implementation of the 7th Pay Commission recommendations and OROP, andcontinuing monetary policy accommodation.
After two consecutive years of deficient monsoon, a normal monsoon would work as a favourable supply shock, strengthening rural demand and augmenting the supply of farm products that also influence inflation. On the other hand, the fading impact of lower input costs on value addition in manufacturing, persisting corporate sector stress and risk aversion in the banking system, and the weaker global growth and trade outlook could impart a downside to growth outcomes going forward. The GVA growth projection for 2016-17 is accordingly retained at 7.6 per cent.
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