OECD pegs India's GDP growth at 7.4pc this fiscal

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With a growth of 7.7% in the three months that ended 31 March, India recorded its highest growth rate in seven quarters and retained the title of the world's fastest growing economy from China, which grew by 6.8% in the same period.

Finance Secretary Hasmukh Adhia said in a tweet that the constant increasing trend of quarterly GDP numbers in the four quarters of 2017-18 indicate that the structural measures of reforms undertaken by government is now bringing rich dividends in the form of higher GDP growth rate.

Moody's Investors Service, a credit rating firm on Wednesday estimated a 7.3 per cent growth in Indian Gross Domestic Product (GDP) for the year 2018, thereby cutting it down from a previously projected 7.5 per cent. Rapid growth in agriculture (4.5%), manufacturing (9.1%) and construction sectors (11.5%) contributed to the overall growth.

The fourth quarter GDP number is the highest since demonetisation in November 2016.

The annual GDP growth for 2018-19 is projected at 7.4% by the participating economist; with a minimum and maximum range of 6.9% and 7.5% respectively. There has been improvement in growth rate in manufacturing and construction.

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It, however, kept growth expectation for 2019 remains unchanged at 7.5 per cent.

The 9.1% growth rate of net indirect taxes (taxes less of subsidies) took GDP ahead of the gross value added (GVA) at basic prices, which stood at 6.5% during the fiscal year, against 7.1% a year ago.

For oil-importing India, the combination of a weaker currency and surging oil prices is a threat not only for the current-account deficit, but also inflation. Economists also point out to many risk factors that could put downward pressure on GDP growth. His government launched a nationwide goods and services tax (GST) but its introduction was botched, almost scuttling India's growth prospects in the near term.

Around two-thirds of economists in the poll who answered an extra question said growth would continue at roughly the same pace through the fiscal year that began on April 1. It seems like we have moved beyond the teething troubles related to GST implementation.

Health of the banking sector will also be crucial. However, the ability of the public sector banks to support lending growth, the risk of monetary tightening and trade wars, and the impact of higher crude oil prices on purchasing power of consumers and corporate earnings have emerged as risks. Some headwinds do remain from the perspective of rising crude oil prices, and unwinding of global easy monetary policy & rising interest rates.

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