₹ GAINS FOR FOURTH DAY

MUMBAI: The rupee strengthened further by 27 paise to close at a fourmonth high of 69.58 against US dollar on Friday, extending gains for a fourth day in a row aided by easing crude oil prices and firm stock markets. The rupee opened higher at 69.68, and touched a high of 69.57. It, however, pared some gains and ended the day up by 27 paise at 69.58 a dollar, a level not seen since August 1.

prices, and hence incomes. (see chart 2)

Pranab Sen, an economist and India’s former chief statistician, said there is little the government can do to resolve this crisis in time for the 2019 elections. The bearish trend in farm prices is largely a reflection of a liquidity crisis in the rural economy, he explained.

MSP based procurement and MGNREGS spending, the main engines of liquidity injection by the government, have remained flat under the present government, Sen said.

He also said the rural economy has still not recovered from the liquidity shock administered by demonetization. We also need to understand that our inflation targeting framework needs to differentiate between agricultural and non-agricultural prices, otherwise the rural crisis will persist, Sen added.

What does the latest GDP data mean for annual growth? Speaking to Bloomberg Quint Soumya Kanti Ghosh, the chief economic adviser for State Bank of India expected the annual GDP growth for 2018-19 to be closer to 7%. DK Joshi, chief economist at Crisil expected the annual GDP growth be 7.4% with a downward bias. India’s GDP has had a compound annual growth rate of 7.3% under the first three years of the present government (2014-15 and 2017-18). The Economic Survey 2017-18 has estimated GDP growth in 2018-19 to be in the range of 7-7.5%.