Mumbai: The Reserve Bank of India (RBI) expects India’s economic growth rate to strengthen to 7.4% in the current fiscal, from 6.6% in 2017-18, on account of revival in investment activity.
The growth will accelerate from 7.3-7.4% in first half of 2018-19 to 7.3-7.6% in the second of half of the current fiscal, said RBI in the first bi-monthly monetary policy statement for 2018-19. “On the whole, GDP growth is projected to strengthen from 6.6% in 2017-18 to 7.4% in 2018-19 – in the range of 7.3-7.4% in H1 and 7.3-7.6% in H2 – with risks evenly balanced," it said.
Several factors, RBI said, are expected to accelerate the pace of economic activities in the year. “There are now clearer signs of revival in investment activity as reflected in the sustained expansion in capital goods production and still rising imports, albeit at a slower pace than in January," it said.
Secondly, global demand has been improving, which should encourage exports and boost fresh investment, it added.
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The Economic Survey tabled in Parliament on 29 January, had estimated that India would re-establish itself as the world’s fastest growing major economy with GDP expanding by 7-7.5% in 2018-19.
RBI noted that “it is especially important that domestic macroeconomic fundamentals are strengthened, deleveraging of distressed corporates and rebuilding of bank balance sheets persisted with, and the risk-sharing markets deepened".