First revised GDP estimates of FY15, FY16 and FY17 to be released today

Based on these estimate, then accordingly the CSO will revise further the GDP and GVA estimate for FY18 as second advance estimate on February 2018.

Prime Minister Narendra Modi at a press conference. Image Source: IANS

The Central Statistics Office (CSO) will release the first revised estimate of India’s Gross Domestic Product (GDP) for the fiscal year FY15, FY16 and FY17 today.

Based on these estimates, the CSO will further revise the GDP and GVA estimate for FY18 as second advance estimate on February 2018.

On January 5, 2018, the CSO estimated growth rate of 6.5% for 2017-18 versus 7.1% in 2016-17 for India's GDP. It is believed GDP or Gross Domestic Product (GDP) would attain a level of Rs 129.85 lakh crore in the year 2017-18, as against provisional estimate of Rs 121.90 lakh crore for 2016-17.

While Gross Value Added (GVA) is anticipated at Rs 118.71 lakh crore in 2017-18 as against Rs 111.85 lakh crore in 2016-17, having a growth rate of 6.1% in 2017-18 from 6.6% in 2016-17 - at a three year low.

India's GDP numbers came in at 6.3% in the second quarter of FY18 (Q2FY18) from 5.7% in Q1FY18, but experts were not convinced that the country's economy is moving on a sustainable path.

source: tradingeconomics.com

The Economic Survey 2018, which was tabled in Lok Sabha on Monday, projected the country’s gross domestic product (GDP) will grow by 6.75% this fiscal. This was significantly lower than the previous fiscal’s estimates that positioned the economy to grow at 7.1%.

“A series of major reforms undertaken over the past year will allow real GDP growth to reach 6.75 % this fiscal and will rise to 7.0 to 7.5 % in 2018-19, thereby re-instating India as the world‘s fastest growing major economy,” the survey said.

Economic Survey expects GVA to come in at 6.1% by end of FY18, as compared to 6.6% in FY17.

Last week, the International Monetary Fund (IMF), while retaining the country’s GDP target at 6.7% for FY18, indicated that India has potential to grow by 7.4% in the next fiscal year, regaining its position as the fastest-growing large economy as China slows down.

It may be noted here that forecasts of Fitch Ratings, CRISIL, Care Ratings and even of RBI are not that lower compared to what the CSO predicted for Indian economy.

Fitch Ratings believes that Indian economy will grow at 6.7% in FY18 from earlier 6.9% citing weaker than expected rebound.

CRISIL too has projected India's GDP at 6.8% with downside bias from previous 7% for FY18.

CARE Ratings, however, estimated that GDP growth would be in the range of 6.7-6.8% for the year.

Bank of America Merill Lynch (BofA-ML) report stated that growth will inch up to 7.2% in 2018-19 (and 7.6% in 2019-20) from 6.5% in 2017-18, to be driven by consumption, supported by a pre-poll step up in public spend rather than investment, given the persistence of surplus capacity.