As government faces criticism from all sides — economists, oppositions, rating agencies — after India’s growth slumped to a three-year low at 5.7%, Department of Economic Affairs (DEA) Secretary Subhash Chandra Garg has expressed hope that India’s GDP might return to 7% plus growth by next year as all indicators point to an “economic turnaround”. In an interview with ET Now, Subhash Chandra Garg said that the government is not ruling out fiscal slippage in the previous quarter due to the implementation of the GST, but the economy is set to get back on track and may achieve a 7% plus GDP growth.
In another interview to CNBC-TV18, Subhash Chandra Garg that the country’s economic slowdown has hit its bottom and will be riding the growth wave one again. He also said that the government is hopeful of achieving the fiscal deficit target. The Centre’s fiscal deficit during the first five months (April-August) of the current fiscal was 96.1% of the Budget estimates at Rs 5.25 lakh crore. The government had aimed to restrict the deficit to 3.2% of GDP in the current fiscal as against 3.5% in 2016-17. In absolute terms, 3.2% deficit for the current fiscal works out to nearly Rs 5.47 crore.
Yesterday, the International Monetary Fund (IMF) lowered India’s growth forecast for the current fiscal by 50 basis points to 6.7%. Responding to the news, the DEA Secretary said, he was surprised by lower IMF growth forecast, but said India said India’s core sector growth is healthy which is a positive indicator for the economy. He further said that even though the private sector is not contributing to the growth, India’s consumption growth story looks good.
Meanwhile, during the first meeting of the newly-appointed Economic Advisory Council, Prime Minister Narendra Modi’s handpicked economists set ten-point agenda including fiscal framework, economic growth, job creation to bring India’s economy back on its feet. Prime Minister Narendra Modi formed the EAC last month after a gap of three years on the back of slow economic growth.