FICCI’s Economic Outlook survey said growth in 2016-17 is expected to be supported by improvement in agricultural due to good monsoon and industrial sectors
Forecast by Reserve Bank of India:
Forecasted 7.6 growth for the current fiscal due to favourable monsoon
The agriculture sector is expected to witness growth of 2.8% in 2016-17, with a range of 1.6% to 3.5%
Industrial growth is expected to grow by 7.1% in 2016-17 and services sector growth is estimated at 9.6%.
Survey conducted during: April-May 2016
- Economists – Industry, Banking and Financial Services Sector
- They were asked to provide forecast for the year 2016-17, Q4 of FY16 and Q1 of FY17
Views of Economists:
- They shared their forecasts about the expected recovery in the investment cycle
- They stated that Government and RBI are working together to address the issues and recovery in the banking system will take time.
- They observed that the passage of Insolvency and Bankruptcy Code Bill, 2015 is a very great step to deal with the issues of exiting unviable businesses
- Easy exit for a business would help in speedy winding up, productive redeployment of capital and make sure availability of credit by freeing up of capital
The median growth forecast for index of
- Industrial production (IIP) has been put at 3.5% for the year 2016-17 with a range of 3% to 4.5%
- Wholesale Price Index based inflation rate for 2016-17 has been put at 2.2% with a range of -1.3% to 2.9%
- The Consumer Price Index has a median forecast of 5.1% for 2016-17 with a range of 4.5% to 5.5%
Fiscal deficit target of 3.5% in 2016-17 – Requested by Economists
Factors: Normal rainfall, improved optimism in domestic growth leading to higher revenue collection through direct and indirect tax collections and government continuing with subsidy rationalisation
To realise the non-tax revenue target for achieving the targeted fiscal deficit to GDP ratio.