Mumbai: The Reserve Bank of India has reiterated that the economy is likely to expand at 7.6 per cent in 2016-17, with a better than anticipated agricultural performance and the possibility of release of payments under the 7th Pay Commission’s in the fourth quarter of 2016-17.
Releasing its Annual Report 2015-16, prepared under the leadership of its outgoing Governor Raghuram Rajan, RBI on Monday stated that the effect of Brexit on the Indian economy has been relatively muted. The Central bank noted that even the paranoia that there would be an immediate impact on equity and foreign exchange markets, has been dispelled. Rajan’s tenure ends on September 4, 2016.
RBI has also pointed out that the commitment of the central government to the path of fiscal consolidation in 2016-17 has enhanced the credibility of fiscal policy, which will, in turn, help in anchoring inflation expectations and in improving the business environment, including by fostering credibility among international investors.
“The passage of the Goods and Services Tax (GST) Bill marks a new era in co-operative fiscal federalism and a growing political consensus for economic reforms,” the report highlighted.
The report said that even as the outlook for capital inflows is optimistic with the recent liberalization of FDI policy, the repayment of FCNR(B) deposits under the special swap scheme due in September to November 2016 will need to be managed carefully.
Industrial activity has been in contraction mode in the early months of 2016-17, pulled down by manufacturing and looking ahead, no strong drivers are discernible at this juncture that could engineer a turnaround. “Some support… may, however, stem from the recent measures taken by the Government such as 100 per cent FDI” in several sectors, RBI said.
“Overall GVA (gross value added) growth is projected at 7.6 per cent in 2016-17, up from 7.2 per cent last year,” RBI said. However, it also cautioned that a rise in the implicit GVA deflator, as Wholesale Price Index (WPI) based inflation hardens, will operate as a statistical downside.
“Abstracting from these external shocks, the near-term domestic outlook appears somewhat brighter than the outcome for 2015-16,” RBI said.
THE Reserve Bank of India has reiterated that the economy is likely to expand at 7.6 per cent in 2016-17, with a better than anticipated agricultural performance and the possibility of release of payments under the 7th Pay Commission’s in the fourth quarter of 2016-17.
Releasing its Annual Report 2015-16, prepared under the leadership of its outgoing Governor Raghuram Rajan, RBI on Monday stated that the effect of Brexit on the Indian economy has been relatively muted. The Central bank noted that even the paranoia that there would be an immediate impact on equity and foreign exchange markets, has been dispelled. Rajan’s tenure ends on September 4, 2016.
RBI has also pointed out that the commitment of the central government to the path of fiscal consolidation in 2016-17 has enhanced the credibility of fiscal policy, which will, in turn, help in anchoring inflation expectations and in improving the business environment, including by fostering credibility among international investors.
“The passage of the Goods and Services Tax (GST) Bill marks a new era in co-operative fiscal federalism and a growing political consensus for economic reforms,” the report highlighted.
The report said that even as the outlook for capital inflows is optimistic with the recent liberalization of FDI policy, the repayment of FCNR(B) deposits under the special swap scheme due in September to November 2016 will need to be managed carefully.
Industrial activity has been in contraction mode in the early months of 2016-17, pulled down by manufacturing and looking ahead, no strong drivers are discernible at this juncture that could engineer a turnaround. “Some support… may, however, stem from the recent measures taken by the Government such as 100 per cent FDI” in several sectors, RBI said.
“Overall GVA (gross value added) growth is projected at 7.6 per cent in 2016-17, up from 7.2 per cent last year,” RBI said. However, it also cautioned that a rise in the implicit GVA deflator, as Wholesale Price Index (WPI) based inflation hardens, will operate as a statistical downside.
“Abstracting from these external shocks, the near-term domestic outlook appears somewhat brighter than the outcome for 2015-16,” RBI said.
