Kumar confident of 7.5% growth in Q2
Seeks home-grown models to generate jobs
After taking charge as the NITI Aayog Vice-Chairman on Friday, economist Rajiv Kumar pegged gross domestic product (GDP) growth at 7-7.5 per cent in the second quarter of the current financial year on the back of good monsoon and clarity over goods and services tax (GST).
Economic growth plunged to a three-year low of 5.7 per cent in April-June of FY18, GDP data had shown on Thursday. Attributing the subdued growth to destocking in the pre- GST period, higher Wholesale Price Index deflator, and base effect, Kumar said a turnaround in corporate investments was already happening.
“I am confident that in the July-September quarter, economy will grow 7-7.5 per cent. Destocking, which was in anticipation of the GST rollout, has completed and now there is more clarity on the new tax regime,” said Kumar, who replaced Arvind Panagariya in the premier government think tank.
“Also, monsoon is good. Many initial public offerings are in the offing. Foreign direct investment is also increasing,” he said.
On genetically-modified (GM) crops and taxing farm incomes, he did not give a direct reply. “We will take an informed stand on the issue,” Kumar said.
Adding: “We need to facilitate an ecosystem outside agriculture like in food processing and make farming remunerative.”
On demonetisation, he said that it impacted growth in the first quarter of FY18 as by then the currency shortage triggered by the scrapping of ~500 and ~1,000 notes on November 9 last year was over.