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Indian economy to grow 7.7% in FY17: FICCI Survey

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 monsoonFICCI

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

Surveyors:

  • 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:

  1. They shared their forecasts about the expected recovery in the investment cycle
  2. They stated that Government and RBI are working together to address the issues and recovery in the banking system will take time.
  3. 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
  4. 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.