Economy may reach 7% growth in 2018: ASSOCHAM outlook

Things have certainly and surely bottomed out, said the year-ahead outlook

GN Bureau | December 27, 2017


#Economy   #Assocham   #Growth   #GDP  


After ”disruptions" like lingering demonetisation effect and GST roll-out, the Indian economy may reach a 7 percent growth in 2018 with government policies tilting towards the stress-ridden rural landscape in the penultimate year before the Lok Sabha elections, said the ASSOCHAM Year-Ahead Outlook (AYAO).

 Against GDP growth of  6.3 percent in the second quarter of 2017-18, the economic expansion  may reach the crucial 7 percent mark by the end of September 2018 quarter , according to the AYAO forecast, while inflation may range between 4-5.5 per cent towards the second half of the next calendar year with the monsoon being  a key imponderable.

 "Our projections for 7 percent GDP growth are based on the assumption of stability in the government policies, good monsoon, pick-up in industrial activity and credit growth as also stability in the foreign exchange rates. The worries on account of crude oil shooting up are likely to abate, if there are no fresh geo-political shockers," said ASSOCHAM president Sandeep Jajodia.

 While the underlying bullish sentiment should continue to prevail in the Indian stock market in 2018, the returns on equity may not be as robust as in 2017. "This is because the 2017 bull run has already factored in the return of growth steadiness in 2018 and the corporate earnings witnessing a pick -up.”

 Weak base of corporate earnings in sync with the lowering of GDP growth in later part of 2017 would also help the revival in the year ahead. "Things have certainly and surely bottomed out. There does not seem to be any fresh bottom; only an uptick," the AYAO noted.

The AYAO is based on a feedback from brainstorming done by several ASSOCHAM sectoral national councils and its top policy organ, the managing committee.

 A press release said that in the run-up to the state assembly elections in Karnataka, Rajasthan, Chhattisgarh, Madhya Pradesh, after the Gujarat polls, the political economy is set to tilt towards the farm sector which has been witnessing some stress. The stress in the agriculture sector is traceable to lack of reforms in the rural economy. The farm produce is highly vulnerable to vagaries of weather.

Even when the farmer produces a bumper crop; he does not get a remunerative price with supply chain in-efficiencies creeping in. Despite political promises, several of the states have not been able to reform the APMC Act, which restricts farmers to sell their produce to a particular set of cartels. Besides, the import-export policies for the agri products need to be revisited to help growers realise better prices, it added.

 The coming budget is expected to be heavily tilted towards the farmers while the industrial focus would be on sectors which create jobs. "A realisation seems to be dawning that growth per se is not enough, the benefits must be seen in the form of higher employment. The year 2018 would see policies in this direction.”

Overall, the year 2018 would be a year of consolidation and corporate balance sheets should look much healthier than 2017, the AYAO said.  As for pick up in investment, the scenario should turn positive only in the third and fourth quarter of 2018-19, till then the current capacity surplus has to be absorbed and debts reduced.

 

Comments

 

Other News

Ordinances promulgated to boost agriculture

 After the announcement of the decisions by the government for reforms in the agricultural sector for raising the income of the farmers as part of the ‘Aatmanirbhar Bharat Abhiyan, the president has promulgated two ordinances with the aim of giving a boost to rural India for farmers engaged in a

How Covid-19 can be a boon to slash tobacco disease burden

 The two-month Covid-19 lockdown has been both a bane and a boon for India’s 27 crore tobacco users. With tobacco not included in the list of essential goods and many states explicitly banning chewing tobacco over concerns of spitting, the sharp drop in availability has forced them to undergo wi

Maharshtra braces to face Cyclone Nisarga

 Even as Mumbai fights challenges posed by COVID-19 on multiple fronts and as the  coronavirus cases continue to rise daily, the city now faces a double whammy with the cyclone ‘Nisarga’ slated to make the landfall in Maharashtra Wednesday. A state-wide alert has been issued for Mumba

Harnessing the demographic capital: how effective are skilling programmes?

Probing data concerning increased job creation and the decline in unemployment has been holding the attention of economists and been subject of discussions in several think tanks in the preceding months. The NITI Aayog reports that 3.53 million new jobs were created between September 2017 and February 2018

It`s time to Unlock now, with economic focus

With Lockdown 4 ending Sunday, the home ministry has issued new guidelines to fight COVID-19 and for phased re-opening of areas outside the Containment Zones. The guidelines, issued based on extensive consultations held with states and UTs, will be effective from June 1 till June 30. The first phase of reo

Small kitchen gardens turn saviours for Gujarat tribal families

When the whole world is fighting COVID-19, food and nutrition security has become a major issue. The pandemic has aggravated the existing food crisis in India, especially in rural and tribal regions. There has been less availability of fresh foods in most parts of the country, and the tribal community has



Archives

Current Issue

Opinion

Facebook    Twitter    Google Plus    Linkedin    Subscribe Newsletter

Twitter