Crisil has sliced its estimate of India’s gross domestic product (GDP) growth by 20 basis points to 6.9 per cent for this fiscal, following a triangulation of downside risks — weak monsoon, slowing global growth, and sluggish high-frequency data for the first quarter.
The slowdown would be pronounced in the first half, while the second half should find support from expected monetary easing, consumption, and statistical low-base effect, Crisil said, while releasing its report on the outlook for India in fiscal 2019 titled ‘Uphill trek’.
Agricultural terms of trade are also expected to improve with a pick-up in food inflation. In addition, farmers would benefit from income transfer of Rs6,000 per year announced by the Centre, and farm loan waivers in a few states.
Says Ashu Suyash, managing director & CEO, CRISIL Ltd, “Given the crosswinds, the sops announced so far might not be enough to pitchfork growth in this fiscal to, or above, the past 14-year average of 7 per cent per annum. Policy action looks more attuned to consumption than investment demand, which means consumption will be the first to ascend as the tide turns.”