LIVE TV
ZEE Business
ZEE BUSINESS
हिंदी में पढ़ें  हिंदी में पढ़ें
Live TV
Live TV
  • Home
  • Budget 2021
  • Personal Finance
    • PPF
    • Mutual Funds
    • Income tax
    • EPFO
    • Income Tax Calculator
    • Personal Loan Calculator
    • Car Loan Calculator
    • Home Loan Calculator
    • SIP calculator
    • SWP Calculator
    • MF Returns Calculator
    • Lumpsum Calculator
  • India
    • Companies
    • Property
    • Startups
    • Uidai
  • Economy
    • Aviation
  • Tech
    • Mobiles
    • Apps
  • Auto
    • Cars
    • Bikes
  • Markets
    • Commodities
    • Currency
  • Jobs
  • Indian Railways
  • World
    • Economy
    • Politics
    • Markets
  • videos
  • photos
  • Authors
  • More ...
    • VIDEOS
    • PHOTOS

Read in App
Business News » India News

After ADB, India Ratings revises India's growth projection to 6.7% in FY18

IndRa in its research report said that the combined effect of demonetisation and introduction of goods and services tax (GST) is proving to be more disruptive for the economy than was expected earlier.

  • Twitter
  • Facebook
  • Linkedin
  • whatapp
  • View in App
After ADB, India Ratings revises India's growth projection to 6.7% in FY18
Representational Image: Photo: Pixabay
Written By: ZeeBiz WebTeam
Updated: Wed, Sep 27, 2017
03:00 pm
Mumbai, ZeeBiz WebDesk
RELATED NEWS
Expert Views: BIG! India's retail inflation eases to 4.59% in December Expert Views: BIG! India's retail inflation eases to 4.59% in December
Budget 2021 Expectations – HOME BUYERS to benefit if Govt accepts this demand; JLL CEO lists following demands Budget 2021 Expectations – HOME BUYERS to benefit if Govt accepts this demand; JLL CEO lists following demands
Jobs, land prices, Covid-19 vaccine, rural India, household savings, NBFCs, banks, consumption, capex - Positives and Negatives | EXPLAINED Jobs, land prices, Covid-19 vaccine, rural India, household savings, NBFCs, banks, consumption, capex - Positives and Negatives | EXPLAINED
Economy, markets, FIIs, chemicals, IT and Pharma - Make money, as India powers to new highs | EXPLAINED    Economy, markets, FIIs, chemicals, IT and Pharma - Make money, as India powers to new highs | EXPLAINED
Setback for China – Trend reversing in favour of India; SFI lands big blow! Know here WHY! Setback for China – Trend reversing in favour of India; SFI lands big blow! Know here WHY!

After Asian Development Bank, now India Ratings revised India's growth projections for the financial year 2018 to 6.7% as against earlier expectation of 7.4%. 

IndRa in its research report dated September 27, said that the combined effect of demonetisation and introduction of goods and services tax (GST) is proving to be more disruptive for the economy than was expected earlier.

"Ind-Ra believes GDP growth will recover quarter-on-quarter in 2QFY18 with impact of demonetisation waning, teething problem arising out of GST implementation being looked into by the government and the festival season round the corner. However, it is unlikely to meet the agency’s earlier projection of 7.4% and will come down to 6.7% during FY18," the report said. 

India's GDP dropped to 5.7% in Q1FY17, which is at three-year low. However, if you look at other numbers, Index of Indutrial production (IIP) grew at just 1.2% in July this year and Consumer Price Index (CPI) based inflation touched five month high at 3.6% in August. Also, Current Account deficit stood at 2.4% of GDP in Q1FY18 which was at four-year high. 

Moreover, the rating agency mentioned that while the introduction of GST cannot be faulted on account of its eventual benefit to the economy, the same cannot be said about the impact of demonetisation.

"Sucking out the high denomination currency while failing to remonetise the economy quickly has in many cases proved fatal for the unorganised sector/small and medium enterprise where business transactions are heavily cash dependent," the agency said.

This can be clearly seen as small enterprises have still not been able to recover fully and their pain is finding a reflection in overall economic growth.  

Further, the rating agency said that with inflation going-up, the Reserve Bank of India (RBI) will have less room to reduce policy rate further. "A further reduction in policy rate is unlikely to make much of a difference, particularly on the investment front, given the large idle capacities in several manufacturing sectors," it added.

Moving ahead, looking at the current economic meltdown, the government is planning to unveil stimulus package to boost the economy. This package is expected to target towards reducing the woes of small and medium enterprises and exporters. But, the availability of fiscal space with the government is questionable.

Explaining what will happen if the government opt for stimulus option, the rating agency said, the likely shortfall in revenue will mainly emanate from the non-tax side. 

The likely fiscal stimulus which the government is contemplating would push the fiscal deficit further. This indicates that that the government is likely to invoke the ‘escape clause’ mentioned in the report submitted by the N.K. Singh Committee to review India’s fiscal discipline rules. One of the triggers for taking recourse to escape clause is ‘far-reaching structural reforms in the economy with unanticipated fiscal implications’, the report added.

ALSO READ:
  • Despite short-term hiccups, India will remain world’s most dynamic emerging economies: ADB
  • How will Modi's economic stimulus impact Indian economy?
  • Economic stimulus on its way but where should it be spent?

Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.

TAGS:
EconomyIndia RatingsIndia GDPGross Domestic ProductGST implementationDemonetisation impactstimulusfiscal deficitGDP Expectation
RELATED NEWS
Expert Views: BIG! India's retail inflation eases to 4.59% in December Expert Views: BIG! India's retail inflation eases to 4.59% in December
Budget 2021 Expectations – HOME BUYERS to benefit if Govt accepts this demand; JLL CEO lists following demands Budget 2021 Expectations – HOME BUYERS to benefit if Govt accepts this demand; JLL CEO lists following demands
Jobs, land prices, Covid-19 vaccine, rural India, household savings, NBFCs, banks, consumption, capex - Positives and Negatives | EXPLAINED Jobs, land prices, Covid-19 vaccine, rural India, household savings, NBFCs, banks, consumption, capex - Positives and Negatives | EXPLAINED
Economy, markets, FIIs, chemicals, IT and Pharma - Make money, as India powers to new highs | EXPLAINED    Economy, markets, FIIs, chemicals, IT and Pharma - Make money, as India powers to new highs | EXPLAINED
Setback for China – Trend reversing in favour of India; SFI lands big blow! Know here WHY! Setback for China – Trend reversing in favour of India; SFI lands big blow! Know here WHY!

LATEST NEWS

Two biz lessons from India vs Australia Cricket Test Match, straight from the Fund Manager's desk

Noida, Greater Noida, Jewar alert! Section 144 by Police till this date - Check order by Gautam Buddh Nagar Commissioner

Bitcoin, cryptocurreny inflows hit record last week - CoinShares

SBI MF Retirement Benefit Scheme: 200% returns than FD! Term insurance of up to Rs 50 lakh! Should you invest? EXPLAINED

FAUG Game Download: Big development! Here is link

PPF vs NPS: Very detailed comparison for retirement fund - EXPLAINED

FD Calculator - SBI vs HDFC vs ICICI Bank: Which will give more return for your fixed deposit money?

Budget 2021 Expectations LIVE: Check latest news, updates, demands of India Inc. here

7th Pay Commission: Big LTC allowance relief for central government employees! Modi Govt grants these relaxations

Crackdown on income tax evaders! Critical notification by CBDT on evasion, Benami Property, Black Money - PAN, Aadhaar not needed, just do this online now

  • India News
  • World News
  • Companies News
  • Market News
  • Personal Finance News
  • Technology News
  • Automobile News
  • Small Business News
  • Income Tax Calculator
  • Live TV
  • Videos
  • Photos
  • Author
  • Rss Feed
  • Advertise with us
  • Privacy Policy
  • Legal Disclaimer

Latest Trending Updates

  • EPFO
  • Budget 2020
  • Income Tax Return
  • Auto Expo 2020
  • Home Loan
  • Business News

Trending Topics

  • Income Tax
  • income Tax Calculator
  • 7th Pay Commission
  • Reserve Bank of India
  • GST
  • Latest Business News

Follow us on

zeebiz
zeebiz

Partner Sites

  • Zee News
  • Hindi News
  • Marathi News
  • Bengali News
  • Tamil News
  • Malayalam News
  • Gujarati News
  • Telugu News
  • Kannada News
  • DNA
  • WION
Copyright © Zee Media Corporation Ltd. All rights reserved