CSO Revises GDP Growth Estimates Upwards To 6.6 %

The growth of Gross Domestic Product (GDP) is estimated to be 6.6 percent in 2017-18, which is same as the annual average GDP growth rate during last 30 years, starting from 1987-88 to 2016-17, reveal the Second Advance estimates released by Central Statistics Office (CSO. However, it may be mentioned that the growth rate of GDP from 2012-13 may not be strictly comparable with the growth rate prior to that period.

The Reserve Bank of India had reduced the Policy Repo rate by 200 basis points beginning 2015. The Monetary Policy Committee (MPC) in its sixth bi-monthly monetary policy statement of February 7, 2018, noted that “the economy is on a recovery path, including early signs of a revival of investment activity. Global demand is improving, which should help strengthen domestic investment activity. The focus of the Union Budget on the rural and infrastructure sectors is also a welcome development as it would support rural incomes and investment, and in turn, provide a further push to aggregate demand and economic activity”. The CSO has revised the GDP growth upwards for 2017-18 from 6.5 percent in First Advance Estimates to 6.6 percent in Second Advance Estimates.

According to the Reserve Bank of India, there is no shortage of systemic liquidity. As mentioned in the sixth bi-monthly statement “The liquidity in the system continues to be in surplus mode, but it is moving steadily towards neutrality. The weighted average call rate (WACR) traded 12 basis points (bps) below the repo rate during December-January as against 15 bps below the repo rate in November. During the two weeks beginning December 16, 2017, the Reserve Bank injected average daily net liquidity of Rs. 388 billion into the system. For December as a whole, however, the Reserve Bank absorbed Rs. 316 billion (on a net daily average basis). As the system turned into deficit again in the fourth week of January, the Reserve Bank injected average net liquidity of Rs. 145 billion. For January, on the whole, the Reserve Bank absorbed Rs. 353 billion (on a net daily average basis).”

India News – Business

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