India likely to grow at 7.9% this fiscal: Crisil

As per the rating agency Crisil’s latest report, GDP is expected to grow by 7.9 per cent in 2016-17 as against 7.6 per cent in the previous fiscal if “monsoon is normal and global situation does not deteriorate from here”. 

“If the rains are normal, it would give agriculture a onetime growth kick, particularly given the low-base effect of the two previous years... that should lift sagging rural demand and by extension, overall GDP growth,” it said.

Accordingly, the rating agency expects the Reserve Bank of India to continue its accommodative monetary stance and cut the repo rate by another 25 bps this fiscal. 

Noting that the economy’s modest recovery has been shaped by “good luck” on crude oil and commodities, Crisil said the medium-term outlook will be shaped by progress on initiatives such as cleaning up of bank balance sheets and successful implementation of the goods and services tax (GST). 

Besides, financial inclusion through initiatives like Jan Dhan and digitisation, among others, will also potentially have a transformative impact on the economy’s growth, it added. On the employment front, Crisil Chief Economist Dharmakirti Joshi noted that the government needs to bring in about 6,000 jobs a month, but it is falling short of the target.

According to Crisil, India’s ranking on ease of doing business and competitiveness is expected to rise in 2016, given the government’s reforms initiatives.