The Indian rupee jumped 5 paise against the US dollar on Monday right after the Finance Minister Arun Jaitley tabled the Indian Economic Survey 2018 which projected FY19 GDP growth at 7-7.5%. The rupee advanced 5 paise at 63.49 apiece US dollar at the interbank foreign exchange market today. “A series of major reforms undertaken over the past year will allow real GDP growth to reach 6.75 percent this fiscal and will rise to 7.0 to 7.5 percent in 2018-19, thereby re-instating India as the world‘s fastest-growing major economy,” a government press release said. The domestic currency started the day at 63.59 against the US dollar, down by 5 paise in the early morning trades. The Reserve Bank of India fixed a reference rate at 63.4983 against the US dollar on Thursday last week.
The Economic Survey report 2017-18 has estimated the economic growth rate in the fiscal year 2019 between 7-7.5% while saying that the rising crude oil price has become a major concern and is expected to grow by average 12% in the FY19. The Economic Survey report 2017-18 also said that private investment is poised to rebound in the fiscal year 2019 and employment, education and agriculture will remain the focus in the medium term. The survey also said that exports will the biggest source of upside potential for the economy.
The GDP growth estimate for the fiscal year 2017-18 is at a four-year low of 6.5% in the current fiscal, the lowest under the Modi-led government, mainly due to the poor performance of agriculture and manufacturing sector, as against 7.1% in the last fiscal. In the second quarter (July-September), India made a comeback at 6.3% from a three-year low 5.7% in the previous quarter. However, massive rationalisation on as many as 178 products in November led to the fall in government’s revenue, which seems to be picking up in later months.
Meanwhile, India’s stock markets started on a positive note on Monday with key equity indices Sensex and Nifty making fresh all-time highs. Shares of HDFC, Maruti Suzuki, Reliance Industries, HDFC Bank, L&T, and TCS rallied the most providing a major uplift to the benchmark Sensex. Shares of India’s largest housing financier HDFC and the IT major Tech Mahindra will be in close watch ahead of their respective Q3 results which are due later today. With the commencement of Budget Session, Indian Economic Survey 2018, Union Budget 2018-2019, Q3 earnings of blue-chip companies such as HDFC, Indian Oil Corporation and ICICI Bank will likely to steer the domestic markets in the week ahead. Going forward in the week, PMI data for the manufacturing sector which is due on Thursday along with the first post-GST budget and the last full budget of the ruling NDA government before the general elections of 2019 will be closely watched by market participants.