India GDP growth likely at 6.5% in 2017-18, down from 7.1% last fiscal: CSO

The Indian economy grew at 7.1% in 2016-17.

The Indian economy is expected to decelerate to 6.5% in 2017-18 from 7.1% in the previous year, marred by the twin policy blow of demonetisation and hasty implementation of the goods and services tax (GST).

Indian economy grew at 6.3% in September quarter. (Reuters Photo)

In the first half (April-September) of the financial year ending 31 March, the economy grew at 6%, indicating that it will accelerate in the second half (October-March) of the financial year.

Data released by the Central Statistics Office (CSO) showed that the agriculture sector is expected to grow at 2.1% in FY18, slower than 4.9% in the previous year, while manufacturing is likely to grow at 4.6%, compared with 7.9% a year ago. Electricity and trade, hotels sectors are the only sectors that will grow at a faster rate of 7.5% and 8.7% in FY18 than in FY17.

The nominal GDP, or gross domestic product at market prices, is expected to grow at 9.5% against 11.75% assumed in the 2017-18 budget presented last year. This may make it difficult for the government to achieve the fiscal deficit target of 3.2% of GDP in a fiscally tight year.