Even as global headwinds, rupee fall and rising crude oil prices taking toll on economy’s health, India’s growth story remains robust, said a report by Dun & Bradsheet.
Even as global headwinds, rupee fall and rising crude oil prices taking toll on economy’s health, India’s growth story remains robust, said a report by Dun & Bradsheet. However, the country needs to ensure that investment accelerates as it will directly create employment opportunities for the millions and also consumption demand. “To continue the growth trajectory, it is the time that investment accelerates as it will directly provide jobs for the millions of population entering the workforce and indirectly accelerate the consumption demand which will keep the growth momentum rolling,” Dun & Bradstreet India Lead Economist Arun Singh said.
Among the major concerns pointed out by the report include rising NPAs and highly leveraged balance sheet of banks. “Strain on India’s external balance sheet has increased due to slide in forex reserve, outflows in foreign investment, increased current account deficit (CAD), rupee depreciation and high global crude oil prices,” he said.
The engineering, infrastructure, construction are the sectors ridden with high NPAs, the report said. For the second quarter, the capital flows have remained negative and FPIs have also pulled out enough money from the domestic markets.
“This has increased the stress on India’s external sector. These issues are not going to be resolved soon till concerns on geopolitical issues and trade wars remain heightened,” the report said.
Meanwhile, the rupee plunged 40 paise to 74.08 versus the US dollar in early trade today, amid rising demand of the American currency from importers and sustained foreign fund outflows. PTI reported citing the forex traders that the US dollar’s strength against a few currencies overseas and worries around the rift between the government and the RBI also weighed.