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The economic growth slowed to 7.1 per cent in 2016-17, the year in which 87 per cent of the currency was demonetised, despite a very good show by the agricultural sector. On a quarterly basis also, the growth in the first quarter of the current fiscal has slipped to 5.7 per cent.
"I think by the time you come to the first quarter of 2018, you will see a stronger recovery, and fiscal 2018-19 will be the much better year than fiscal 2017-18. And that will then continue because it will on much more sustained basis," he said adding that growth will be about 6.9-7 per cent in the current fiscal year.
"In the next fiscal year, the growth would be about 7.5 per cent," Kumar said in an interview.
The Niti Aayog vice chairman said the country did very well from 2007-13 and the downward cycle started in 2013-14, mainly because of spurge in lending to undeserving projects since 2007.
"The high economic growth between 2007-13 was on the basis of huge increase in loans and spurge in private debt for which there was zero control. That was given by the banking sector to the most undeserving cases (projects) and on completely false assumptions," he observed.
Noting that growth stalled after 2013 because of policy stance, Kumar said, "As soon as that happened, all the debt began to becoming bad and therefore downward spiral started."
"My considered view and gut feeling is that, this downward cycle has now bottomed out in July," he asserted.
While the International Monetary Fund (IMF) has lowered India's growth forecast for the current fiscal by 0.5 percentage points to 6.7 per cent, the World Bank has pegged economic expansion at 7 per cent, down from 7.2 per cent projected earlier.
The Asian Development Bank too lowered India's current fiscal growth to 7 per cent from 7.4 per cent, while the RBI cut economic growth forecast to 6.7 per cent from earlier projection of 7.3 per cent.