India’s GDP can Grow by 7.9% in 2016-17

Mumbai: India’s GDP can grow by 7.9 per cent next fiscal if the monsoon is normal and government implements the reform measures announced so far, domestic rating agency Crisil said on Friday, according to a report published in

The growth forecast, highest by any house and even above the government’s own estimate of 7-7.75 per cent, has been arrived assuming a faster growth in agriculture, Crisil Chief Economist Dharmakirti Joshi said in a concall.

The country has faced weather shocks for three consecutive years, including two years of deficient rains in 2014 and 2015, and a normal monsoon season this year can lead to a 4 per cent growth in agriculture on lower base effect, he explained.

Even though he flagged concerns on the banking front, Joshi said implementation of reforms should help the economy achieve higher growth and termed 2016-17 as the “year of reckoning” which has the potential to illustrate the path which the economy can take.

Joshi said oil and commodity prices are expected to remain soft, which will ensure that crucial macroeconomic indicators like fiscal deficit and inflation are as per expectations.

He termed the journey till now as a “modest recovery” helped by good luck and strong policy push, but highlighted the need to implement reforms faster. He also said the pick-up in private investment cycle should begin from the second half of the next fiscal year.

Welcoming the Budget as one with realistic growth and revenue targets, he said achievement of the divestment target, which the government has trailed in the past, will be keenly watched.

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