Union Finance Minister Arun Jaitley said that Indian economy is on the path of recovery despite uncertainty and volatility in the global economic situation. He said that India recorded a higher growth of 7.3 per cent in 2014-15 as compared to 6.9 per cent growth achieved in 2013-14 and 5.1 per cent in 2012-13, despite the slowdown witnessed in the world economy, pointing toward resilience of the Indian economy. He said that the rate of growth of GDP in the first half of the current financial year 2016-17 is estimated to be 7.2 per cent.
According to IHS report of ‘country risk statement' on short-term basis, improving business sentiment and the stable reform-oriented government should help jump-start India’s economic recovery, but no sharp rebound is expected. With market expectations running high, though, it is critical for the government to focus on addressing policy paralysis and accelerating much-needed reforms. Restoring momentum in the manufacturing sector and infrastructure investment will be essential. Concurrently, the manufacturing sector will benefit from the government’s extended tax benefits and improving domestic and external demand. Meanwhile, space for monetary and fiscal policy stimuli will remain limited. With the Reserve Bank of India (RBI) determined to bring consumer price inflation down to 6% by January 2016, sustained monetary policy easing is unlikely in the near term. Government spending will be also constrained by the need to meet fiscal targets. As a result, we expect real GDP to accelerate with more robust recovery anticipated in FY 2016.
Controlling inflation remains the main focus for the central bank, as it carefully calibrates its monetary policy course. The RBI's balanced inflation outlook rests on assumptions of stronger government action on food supply and better fiscal consolidation, which would help contain inflationary pressures, bringing consumer price index inflation down to the desired rate of 6% by January 2016. Consistent with this outlook, IHS believes that the rising food and fuel price pressures should be balanced by the lagging impact of previous rate hikes, high base effects, and still-weak domestic demand, keeping the overall price pressures contained without the need to raise interest rates in the near term. Concurrently, with inflation risks remaining significant, previously considered interest-rate cuts should also not be expected in the coming months.
Smart city Projects:
The Government has announced the list of 98 cities, including 24 state capitals to develop as smart cities. “Barring Jammu and Kashmir, all states have finalized the names of proposed Smart Cities through competition. So there are total 98 cities being selected across the country,” sources in Urban Development Ministry said recently. The Smart Cities Mission is an innovative and new initiative by the Government of India to drive economic growth and improve the quality of life of people by enabling local development and harnessing technology as a means to create smart outcomes for citizens.The Indian economy grew by 7.4 percent during the third quarter of 2015, driven by this government spending on infrastructure and by private consumption.The Government has started implementing the vision of Smart City to every citizen through different foreign investments which will not only help in country’s economic and developmental situation but also it will help to build bilateral ties with other nation.
After an impressive growth of 9.87% in October which triggered hopes of a recovery in the manufacturing sector, India's factory output declined by 3.19 percent in the following month into the negative territory, due to a (-)4.4 percent drop in manufacturing activity.As per data on index of industrial production (IIP) released by the Central Statistics Office, the cumulative growth of the country's factory output was also pulled down to 3.9 percent in the first eight months of the current fiscal year.Mahesh Gupta, President, PHD Chamber of Commerce and Industry, in a press statement said the slowdown in domestic demand is a major factor and the government must take demand boosting measures to help industry growth to revive in the coming times, said Gupta.
As Prime Minister Narendra Modi announced Startup India Stand up India campaign it has triggered hope of recovery in the employment sector and nations income.Prime Minister Narendra Modi views on startups has a key to providing jobs to aspirational young Indians, seeking to fuel the sector through a government campaign, "Startup India, Stand up India". And the contribution of the SME and the startups to nations GDP in inevitable, therefore 'Startup India Campaign' can be a tool for economic recovery in 2016.
Picture courtesy: Stephen Williams (freeimages)