ALSO READFY18 GDP advance estimates today: A look at hits & misses of the past Full text: Govt estimates show India's FY18 GDP growth slowing down to 6.5% India forecasts FY18 GDP growth at 6.5% vs 7.1% in FY17 Demand-supply shock debate divides economists GDP growth down to 3-year low of 5.7% in April-June quarter of FY18
India lowered its forecast for the current year's economic growth on Friday before a federal budget is released next month, as businesses were hit by the chaotic launch of new nationwide tax last July.
Gross domestic product is now estimated to grow an annual 6.5% in 2017/18, slower than a provisional 7.1% growth in 2016/17, Ministry of Statistics said in a statement.
Most private economists had pared the growth forecast to 6.2 to 6.5% for this fiscal year, citing the teething troubles faced by businesses during the roll out of a goods and services tax (GST).
Ashima Goyal, Member, PM-EAC said that the GDP numbers have been helped by spur in core sectors' growth in the last quarter.
Pronab Sen, ex-CSO, said: "This data doesn't reflect what is happening in the unorganised sector. Only demand side is somwehat clear, not the output side. The question that the data begs is if the agri sector was pulled down merely by the rabi crop problem or is it the animal husbandry sector."
Sajjid Z Chinoy, Chief India economist, JP Morgan: GDP will clock lesser than 6.5% growth. CSO has to assume govt will achieve 3.2% fiscal defcit target. Hence, they reached a more optimistic number.
Siddharth Sanyal, director and chief economist, India Barclays, said "Exports are not improving and it remains to be seen whether govt will continue to keep pace in spending."
Soumya Kanti Ghosh, chief economist adviser, SBI, said: "Second half GDP numbers should be better than CSO's estimates. Last year, they had revised the numbers after the budget. So today's numbers might have a shelf life of two months. GDP will not deviate much from prediction. I think the GVA estimate is conservative. It should be around 6.3%."