Breaking News

You are here » Indian-Commodity  :  Top News  :  Crisil pegs India's GDP growth at 7.9% in FY 17 on back of good monsoon

28-Jul2016

Crisil pegs India's GDP growth at 7.9% in FY 17 on back of good monsoon

Rating agency CRISIL in its latest report has pegged India's economic growth at 7.9 per cent in the current fiscal year, assuming a good monsoon. It expects agriculture to grow by 4 per cent and consumer price inflation to be restricted to 5 per cent in 2016-2017. However, it also cautioned that stress in rainfall in certain parts of the country and excess downpour in some other regions may be a cause for worry. Sub-normal monsoons have taken a toll on agricultural production in the last two fiscals and Agriculture GDP growth averaged 0.4% in the last two fiscals, much below the long-term trend of 3%. Crisil has developed a Deficient Rainfall Impact Parameter (DRIP) index, which measures the impact of rainfall levels on each crop across geographic regions

Crisil further stated that despite a slow start in June, rains have caught up and were just 1 per cent below normal as of July 25. This has helped reservoirs to bounce back from the lows seen in the beginning of the fiscal, boosting farmers' confidence. It added that due to good monsoon, backed by favourable temporal and spatial distribution, agriculture growth can surge to six per cent from a weak base of last year and, therefore, push up GDP growth. On inflation, it expects ample kharif production to boost supply and bring down food inflation. This will help offset sticky services inflation and higher crude oil prices.

The report said it does appear that the farm sector will perform well this year and help the economy in two ways -- keep prices under control and provide higher incomes to the farmers. Accordingly the rural consumption is expected to revive, pushing up private consumption which will raise capacity utilisation and kick-start the investment cycle by the end of this fiscal. CRISIL estimates consumption-oriented sectors to gain, especially as rural demand soars. These include automobiles, particularly two-wheelers, and consumer durables. On the inflation front, it expects ample kharif production to boost supply and bring down food inflation. This will help offset sticky services inflation and higher crude oil prices.




Related News

View all news

Crude oil futures end lower on Monday

Crude oil futures ended lower on Monday as steep declines in the US stock market fed an aversion to so-called riskier assets, which include oil. Meanwhile, the US-China trade dispute escalated as China......

Gold futures trade flat on Monday

Gold futures was trading flat on Monday as growing uncertainty over whether the United States and China will be able to reach a deal to end their escalating trade war fueled safe-haven demand for the precious......

Jeera futures trade higher on rising demand

Jeera futures traded higher on NCDEX on the back of rising physical and export demand at the spot market. However, higher availability of crop this season, capped some gains.The contract for May delivery......

Top News

View all news

SRF, NIIT Technologies and United Bank of India to see some action today

SRF has entered into a definitive agreement to sell its Engineering Plastics Business to DSM, the Life Sciences and Materials Sciences Company in an all-cash transaction, amounting to Rs 320 crore. The......

NIIT Technologies concludes sale of 88.99% stake in ESRI India Technologies

NIIT Technologies has concluded the sale of 88.99% equity shares in ESRI India Technologies, India to Environment Systems Research Institute Inc., USA. Consequent to above sale, ESRI India Technologies,......

United Bank of India to raise Rs 1,500 crore by various means

United Bank of India has received approval to raise equity capital not exceeding Rs 1,500 crore in one or more tranches during the financial year by way of Qualified Institutions Placement, Public Issue,......