GDP growth may slow down to 6.5% in FY18

NEW DELHI: The Indian economy is forecast to grow at its slowest in four years in FY18 but is expected to pick up pace in the second half of the year. GDPis seen growing 6.5% in FY18, down from 7.1% last year, according to the first advance estimates released by the statistics office on Friday. Gross value added (GVA) growth is forecast at 6.1% against 6.6% last year. In the first half, GDP growth was only 6% because of the disruption caused by the goods and services tax (GST) and the lingering impact of demonetisation. "GDP growth of 6.5% for 2017-18 implies growth of 7% for the second half," economic affairs secretary Subhash Chandra Garg tweeted. "Confirms strong turnaround of economy. Investment growth of almost twice of last year's indicate investment reviving." 
Chief statistician TCA Anant echoed those sentiments. "Effectively, we are calculating the H2 growth in the economy at around 7%... maintain the trend of increasing growth." He added that manufacturing estimates included GST impact during the initial quarters. GST was imposed on July 1last year. 

"In a way, we are being conservative in our estimates," he said, and added that the statistics office has estimated the numbers assuming that budgetary targets will be met. Growth is below the government's early estimate. The second instalment of the Economic Survey released in August last year had seen growth at the lower end of the 6.75-7.5% range forecast in February. 

The lower growth will raise pressure on finance minister Arun Jaitley ahead of the February 1 budget to take steps to strengthen recovery even as he allocates more funds for key stakeholders ahead of elections next year.