RBI Governor: Pace of growth to speed up this fiscal

Although the real GDP growth was moderated to 6.6 pc from 7.1 pc a year ago, there was a strong rebound in the second half of the year on the back of a turnaround in investment demand, the Reserve Bank of India governor said. Patel was addressing the International Monetary Finance Committee here. The economy gave a resilient performance in 2017-18.

This was supported by acceleration in manufacturing, rising sales growth, a pick-up in capacity utilisation, strong activity in the services sector and a record agricultural harvest.

“Several factors are expected to help accelerate the pace of growth in 2018-19. There are now clearer signs that the revival in investment activity will be sustained,” he said. Global demand has been improving, which should encourage exports and boost fresh investments, Patel said, adding real GDP growth was expected to expand at 7.4 pc in 2018-19, with risks evenly balanced. 

In his address, Patel said since Nov 2016, headline consumer price inflation had generally remained below the medium-term target of four per cent. An unusual spike in vegetables prices pushed up inflation to a recent peak of 5.2 pc in Dec, but it eased in subsequent months to reach 4.3 pc in March.  Patel said many factors were likely to influence the inflation outlook, including a possible moderation in food prices if the monsoon turned out to be normal and was supported by an effective food supply management. 

India is poised to remain the fastest growing large economy in the world and its GDP is slated to reach $5 trillion by 2025 as the economic reforms adopted in the last few years have started to bear fruit, Economic Affairs Secretary Subash Chandra Garg said at the 97th meet of Development Committee of the World Bank in Washington.