Breaking News

You are here » Indian-Commodity  :  Economy  :  GVA to expand by 7.3% in FY18 with risks evenly balanced: RBI


GVA to expand by 7.3% in FY18 with risks evenly balanced: RBI

Ahead of the release of the gross domestic product (GDP) data for the first quarter of 2017-18, the Reserve Bank of India (RBI) in its annual report for 2016-17 has stated that with risks evenly balanced, the economic activity as measured by Gross Value Added (GVA) is expected to expand by 7.3% in the fiscal year 2017-18, up from 6.6% in 2016-17. It said that favorable domestic conditions are mainly expected to enable a quicker pace of overall economic activity during the year. It also expects the headline inflation to be in the range of 2-3.5% in the first half of 2017-18 and 3.5-4.5% in the later half.

The annual report said that continuing re-monetisation should enable a pickup in discretionary consumer spending, especially in cash-intensive segments. Government spending continued to be robust, cushioning the impact of a slowdown in other constituents. It also said that expected normal monsoon and the resultant replenishment of reservoirs, policy initiatives of the government such as hike in minimum support prices (MSPs) and increasing crop insurance coverage are likely to help in boosting crop production and supporting rural demand.

The central bank further said that in the fiscal sphere, while the gains to growth, efficiency and tax buoyancy over the medium term from goods and services tax (GST) are unequivocally recognised, near- term uncertainties with regard to revenue mobilisation there from - which could impact fiscal consolidation at both centre and state levels - cannot be ruled out as this fundamental reform gains pan-India traction. On the banking sector the report said, as of end-March 2017, 12.1% of the advances of the banking system were stressed. A sharp increase in provisioning for NPAs adversely impacted profitability of banks, with the public sector banks as a whole continuing to incur net losses during 2016-17.

The RBI also said that farm loan waivers by state governments have potential to crowd out corporate borrowing if financed through state debt issuance. As per initial estimates, the total loan waivers announced during 2017-18 (up to August 2, 2017) amount around 0.4% of the GDP. It added that depending on possible cutback under other expenditure heads, this may result in an increase in the consolidated GFD-GDP ratio of states by about 20-40 basis points.

Related News

View all news

Job creation trebles in February to reach 8.61 lakh: EPFO

The Retirement fund body, Employment Provident Fund Organisation (EPFO) in its latest 'Net Payroll Data' report has showed that job creation in India's formal sector almost trebled to 8.61 lakh in February......

Reform process in India must be completed in coming five years: Arvind Panagariya

In order to create decent jobs for the masses as well as give serious thought to privatising the public sector banks (PSBs), Arvind Panagariya, who had served as the first Vice Chairman of the NITI Aayog......

P-notes investment jumps to Rs 78,110 crore at March-end

With positive market sentiments, the share of foreign portfolio investments (FPI) in domestic capital markets through participatory notes (P-notes) jumped to Rs 78,110 crore at the end of March. According......

Top News

View all news

Bank of Baroda's board to consider issuance of equity shares of Rs 5,042 crore to Govt

Bank of Baroda's board is going to consider issuance of equity shares of Rs 5,042 crore to Government of India on a Preferential Basis. The meeting of the Board of Directors of the Bank is scheduled to......

Gujarat Petrosynthese to invest surplus funds in mutual funds, bonds, securities, shares

Gujarat Petrosynthese has received an approval to invest surplus funds in mutual funds, bonds, securities, shares, inter corporate deposits etc. to optimize its returns. The Board of Directors of the Company......

Reliance's Retail Unit delivers record-breaking performance in revenue, profits during FY19

Reliance Industries' Retail Unit--Reliance Retail has delivered a record-breaking performance in revenue and profits growth for the year 2018-19. Segment Revenue for FY19 grew by 88.7% Y-o-Y to Rs 130,566......