Economic Survey projects 6%-6.5% growth for 2020-21, hints economy bottomed out
The Economic Survey 2019-20 tabled in the Parliament on Friday has projected a 6%-6.5% growth for 2020-21, according to news agency PTI. The projection indicates that the economy has bottomed out.
India’s gross domestic product (GDP) grew at 4.5% in the second quarter of the current financial year, the lowest since March 2013. According to the National Statistical Office’s (NSO) first advance estimates, India’s GDP is expected to grow at 5% in 2019-20, the lowest since 2008-09.
The sign of recovery is also shown in the improved collection of Goods and Services Tax (GST), which is a tax on consumption and directly reflects the mood of the market. Officials expect the GST collection to touch a record in January 2020, maintaining the uptrend since November last year.
The GST collections were above Rs 1 lakh crore for two consecutive months – November and December 2019 after it had plunged below Rs 1 lakh crore mark for three straight months – August, September and October 2019.
The automobile sector, a weathervane of economic sentiment and also industrial health, is showing confidence as Maruti Suzuki India (MSI), country’s largest car maker, on Monday raised prices of its select models.
The Hindustan Times first reported about the imminent economic recovery on January 3. The RBI’s Monetary Policy Committee (MPC) in its December meeting had expected GDP growth to start a recovery in the second half of the current fiscal year. The MPC had projected GDP growth in the second half to be in the range of 4.9%-5.5% against 4.8% between April and September last year.
The data scan by the economic survey suggests that the economic slowdown may be tapering with green shoots visible in a few quarters of the economy.
“All eyes are now on tomorrow’s budget as the government walks a tightrope of balancing growth and inflation without raising fiscal deficit much,” Majumdar said