- The RBI expects India’s economic growth rate to accelerate to 7.4 percent in the current financial year on pick up in industrial activity and good monsoon.
- RBI in its annual report stated that its monitory policy will continue to be guided by the objective of achieving the medium term target for retail inflation of 14% with in a tolerate band of +/- 2% .
- It Cautioned that India’s external sector will have to confront global head winds but expressed confidence that the current account deficit would largely be financed by foreign direct investment.
- The report notes that agricultural production is likely to remain strong, growth impulses in industry are strengthening, corporates are reporting robust sales growth and improvement in profitability and service sector activity set to gather pace.
Significance & Future Scenario
- There are clear sign of recovery in investment and production.
- Upcoming year is an election year so the consumption and manufacturing will slump because of implementing model code of conduct.
- The Future momentum will broadly depend upon
- The Rate of Inflation
- Fiscal deficit
- Imports, Particularly crude oil prices
- NPA resolution process and efficacy of ‘IBC’
- Stable Rupee
- Due to USA’s sanction on Iron has left the future of oil Import uncertain for India. We have to diversify our imports from other countries.
- As the certainty glooms over the world market due to ‘Trade War’ between two largest economy, has consequently weakened the rupee. Stabilising rupee should be prioritised.
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