Drought-like situation due to sparse monsoon could hit rural consumption demand and gross domestic product growth, said Chanda Kochhar, MD and CEO, ICICI Bank.
While Kochhar said it would be premature to quantify the impact of monsoon as the situation differs from state to state, Citi India revised its GDP growth projection for fiscal year 2010 by 100 basis points.
Factoring in negative agricultural growth, Citi India cut GDP estimates from 6.8 per cent to 5.8 per cent. However, it retained 2011 GDP growth expectation at 7.8 per cent.
“A drought-like situation could impact the purchasing power in the rural area,” said Kochhar.