With India’s economy achieving the projected growth rate of 7.6% in FY16, economic affairs secretary Shaktikanta Das on Wednesday said the growth could accelerate further to 8% in the current fiscal year on policy measures and likely good monsoon.
He credited the government’s “very effective and prudent” fiscal management for achieving the fiscal deficit target of 3.9% as well as 2.5% revenue deficit target for FY16 without cutting Plan spending for the first time in five years.
Nearly Rs 39,000 crore increase in government capital expenditure, which stood at Rs 2.35 lakh crore, played a crucial role in reviving economic activity in the absence of a pick-up in private investment in FY16.
“With good monsoon and better performance of agriculture and rural sectors due to various measures, the growth rate of 8% can be achieved (in FY17),” Das said.
Private sector investment is likely to increase due to increased private consumption and rural demand during 2016-17, he added.