The growth revival in fiscal 2019 would be consumption-led, with mild support from investments. A normal monsoon in 2018, benign interest rates, the return of pent-up demand and implementation of house rent allowance (HRA) revisions at the state government level would support growth, together with the government’s thrust on rural and infrastructure sectors.
real GDP growth
In an environment of subdued global growth and weak investments, India’s GDP cannot grow fast in the short run. For fiscal 2018 as a whole, we are in the process of revising down of our GDP growth forecast down from 7.4% stated earlier.That said, normal monsoon, softer interest rates and inflation, and pent-up demand will support consumption growth in the remaining quarters. There will also be a mild push to consumption from budgetary announcements.