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India's GDP growth during the fiscal 2018-19 is expected at 6.9 percent, marginally lower than CSO's advance estimate of 7 percent, rating agency Ind-Ra Monday said and urged the new government to take short-term measures to arrest slowdown in the economy.
The Central Statistics Office (CSO) will be releasing the quarterly GDP estimate for the quarter January-March (Q4FY19), 2019 and provisional annual estimates for 2018-19 on May 31.
"Ind-Ra expects FY19 GDP growth to be 6.9 percent as against the 2018-19 advance estimate of 7 percent," it said. The GDP growth was 7.2 percent during 2017-18.
In a release, India Ratings and Research (Ind-Ra) said it expects 4QFY19 GDP growth to decelerate to 6.3 percent from 6.6 percent in previous quarter.
Clearly, Ind-Ra said 2018-19 will be the second consecutive year of an economic slowdown in India.
Arresting the slowdown and reviving the economy will be the first challenge for the new government, it said.
Prime Minister Narendra Modi will be taking oath of office on May 30 for a second time after BJP-led NDA secured majority in the just concluded general elections.
"In Ind-Ra's opinion, the new government will have to devise and execute both short-term and medium-to-long-term measures to arrest the slowdown.
"While cyclical challenges can be addressed through short-term measures, the need of the hour is to address the structural challenges plaguing the Indian economy," it said.
It further said that although little can be done with regard to the global trade environment, certainly a more proactive policy intervention could be pursued to aggressively revive investment.
Meanwhile, private sector lender ICICI Bank in a research report said the immediate priorities of the government should be focused on agricultural sector especially improving farm terms of trade, supporting systemic credit growth not just for banking sector but for the Non Banking Financial Company (NBFC) sector as well.
Growth rates to stay weak but a combination of strong government policy support and benign monetary policy environment should lead to recovery in growth prospects towards the second half of this fiscal year, it said.
According to the report, short term policy priorities of the new government should include, agricultural price stability measures, supporting system credit growth especially to small industry, and provision of adequate liquidity and accommodative policy environment among others.
Long term policy priorities should include, land and natural resource related measures, labour related measures, capital related measures, productivity related measures and sector-wise reforms, ICICI Bank's report added.