Business

Government Forecasts Reduction In 2017-18 GDP Growth To 6.5%

AASTHA SINGAL | 0
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| January 5 , 2018 , 19:26 IST

The Central Statistics Office has revealed some estimates on Friday predicting that the gross domestic product (GDP) of Indian economy will grow at 6.5 percent in this fiscal year (2017-18). Notably, the expected growth rate is lesser than last two year's GDP of 7.1 percent and 8 percent respectively.

"The growth in GDP during 2017-18 is estimated at 6.5 percent as compared to the growth rate of 7.1 percent in 2016-17," the Ministry of Statistics & Programme Implementation said in its estimate of National Income for 2017-18.

The estimate will play a crucial role in the finance ministry before presenting the Budget 2018 on February 1. Many economists have blamed the chaotic implementation of Goods and Services Tax (GST) in July for the reduced GDP.

After the official data were released by the Central Statistics Office (CSO) at a press conference, Chief Statistician T C A Anant said, "Implicit calculation suggests H2FY18 growth will be 7%."

Despite the poor estimates, the analysts are optimistic about economic growth in 2018-19. "We expect growth to normalise gradually over the next four to six quarters as the disruptive impact of major policy changes fades," Standard Chartered said.

The released figures can be seen as the closest picture of the economy as the strike rate of the correctness of these data with the first provisional data in the past two years. As for computing budget numbers such as fiscal deficit, advance estimates have been used.

The practice started last year after the government shifted the presentation of the Union Budget to 1st February from the end of February. The Indian economy recovered from its three-year low of 5.7% GDP growth in the June quarter to grow at 6.3% in the September quarter.