In midst of Centre stepping into the third year of its term and while the speculations around Raghuram Rajan’s future as RBI Governor is heating up, Indian economic growth has recorded a neat 7.9 percent mark in the last quarter of 2015-16 fiscal year, when the emerging global markets of China, Brazil and Russia are facing slow down. Several pro-growth policies initiated by government like GST (Goods and Service Tax) Bill, the increased infrastructure and rural spending have been widely accounted for Asia’s third largest economy to peg an overall GDP growth of 7.6 percent in the last fiscal year.
Better outputs of agriculture sector despite the drought, power & mining industry, refinery products, steel, fertilizes, MSME and electricity production have accelerated the growth. The home loan cuts have improved the consumer sentiments and more people have bought new vehicles and purchased new homes. Ambitious Smart City mission and several other pro-active measures from the government can expect to receive a significant impetus from the economic growth. We can also expect the Reserve Bank of India to pencil another home loan rate cut in this month when the meet to review policy.
The growing economy is widely expected to bolster the reforms and initiative of the government. The above average monsoons predicted this year is also expected to keep the growth curve stable and steady. The hopes of economists now have gained strength as they are expecting the GDP to reach 8 percent, which was the average growth rate recorded between 2003 and 2011. Coupling with this, the inflation is also contained around 5 percent and the forex reserves are also well nurtured to stabilize the growth rate.