FM hopeful of 7% growth as manufacturing ‘bottoms out’

Finance Minister Arun Jaitley on Thursday attributed the lower gross domestic product (GDP) numbers to pre-GST (goods and services tax) destocking of goods and expressed hope that the economy will grow at 7 per cent, saying manufacturing had bottomed out.

He further said that improvement in the global economy and good monsoon will aid GDP growth in the coming quarters which ought to be better if the country is to achieve the annual growth target.

The Economic Survey had projected a growth of 6.75 per cent to 7.5 per cent for 2017-18.

“Global economy is improving faster than what we thought and that is a positive trend. The domestic public investment is certainly going to be quite high because the revenue trend seems to be positive. On the same rationale, with reforms continuing, the confidence in the economy globally being high, the FDI (inflow) will continue. The monsoon overall — the bigger picture — looks to be good and therefore that should send a positive impact,” he said.

“Another area of possibility is, are we able to get early successes for the banking system for the insolvency itself,” he said.

Terming the first quarter GDP data as a matter of concern, the finance minister said the government requires both in policy and investment to work more to improve this figure.

A detailed analysis shows that while agriculture is in the normal range, manufacturing has bottomed out to 1.6 per cent from 3.1 per cent.