India GDP growth likely to rise in Q2, Q3 on reforms

new delhi — Ahead of the release of official data on Indian gross domestic product (GDP) growth in the second quarter, industry chamber Ficci said on Monday that the July-September GDP is expected to improve to 6.2 per cent and rise further to 6.7 per cent in the third quarter of the current fiscal.

Pulled down by sluggish manufacturing, growth during the first quarter of this financial year fell to 5.7 per cent, clocking the lowest GDP growth rate under the Narendra Modi regime. The previous low of 4.6 per cent was recorded in January-March 2014.

“The slowdown in the economy due to demonetisation and the adjustment impact of GST implementation seems to be bottoming out and as the new indirect tax regime stabilises, the economy would see an improvement in its performance,” Ficci said in a release, citing the results of its Economic Outlook Survey conducted among economists.

“Steps taken by the government to reduce the compliance burden related to GST and make implementation smoother, the plan announced for recapitalisation of banks and the thrust on the infrastructure sector have been acknowledged by the survey participants as indicating the government’s resolve to address key issues that are hobbling growth,” it said.

“High interest rates must be reviewed by the Reserve Bank of India [RBI] as these impact growth and rupee value, the economists surveyed said,” it added.