Eco Survey pegs FY20 GDP growth at 7%, sees rebound in investment cycle
The Economic Survey 2019 on Thursday projected a rosy picture for the economy, saying it will grow at a healthy 7 per cent this financial year, riding a stable macro environment.
The survey forecast a rebound in investment cycle in FY20. “The investment rate seems to have bottomed out,” it suggested, adding that “green shoots of investment activity seem to be taking hold.”
It said the projected decline in non-performing assets of banks will help push the capex cycle.
The Survey, prepared by Chief Economic Adviser KV Subramanian, said structural reforms of last few years are on course, and huge the political mandate for the incumbent government augurs well for growth prospects.
It pegged the fiscal deficit for FY19 at 5.8 per cent and put at rest the debate over the real pace of expansion of the economy, saying the growth rate averaged at a high 7.5 per cent in last five years.
The Survey said that India will need to grow at 8 per cent per year to be a $5 trillion economy by FY2025. Earlier in the day, Chief Economic Adviser Krishnamurthy Subramanian had said that his team has put in a lot of effort and dedication to prepare the Survey. “I hope the results are good,” ETNow quoted him as saying.
The Survey suggested that the share of informal sector in manufacturing growth fell in FY19.
Domestic equities didn’t show any kneejerk reaction to the findings of the survey. The Sensex traded 80.79 points, or 0.20 per cent, higher at 39,920, while Nifty ruled at 11,947, up 30 points.
Market’s fear gauge VIX stood at 13.42, down 2 per cent.
- FY20 GDP growth seen at 7% on stable macros
- India needs to grow at 8% per year to be $5 trillion economy by FY25
- Greenshoots of investment activity seem to be taking hold
- General fiscal deficit seen at 5.8% in FY19
- Declining NPAs should help push capex cycle
- Farmers may have produced less in FY19 on fall in food prices
- GDP growth averaged at a high of 7.5% in last five years
- Rural wage growth started increasing since mid-2018