‘India’s growth will rebound to 7%-7.5%’:

‘India’s growth will rebound to 7%-7.5%’:

Context:

The new Vice-Chairman of NITI Aayog Rajiv Kumar is hopeful that India’s economy will expand at 7%-7.5% in the current quarter after declining for five consecutive quarters.

Introduction

• He also categorically dismissed any link between the slowdown in growth and demonetisation.
• As per official data released on Thursday, India’s GDP grew at 5.7% between April to June this year, the slowest pace in 13 quarters.
•  Dr Kumar said that with a good monsoon, increase in FDI and FIIs, smooth rollout of GST and a large number of IPOs lined up, economic growth in the July-September quarter will be in the range of 7-7.5%.

Demenetisation and its impact:

• Dr. Kumar said there cannot be any link between demonetisation and slowdown in GDP because re-monetisation started in the first week of January.
• He said that demonetization had no role in the fall of GDP.

Reasons for glow growth:

• Dr Kumar said that the decline was mainly because of the fact that April-June quarter saw active destocking by firms in anticipation of GST.
• Active de-stocking in anticipation of GST(Goods and Services tax), higher base and a deflationary impact of WPI(wholesale price inflation) had led to a fall in economic growth, according to Dr Kumar.       

Private investment:

• Dr kumar said that India was a country of entrepreneurs and private investors who accounted for 70% to 80% of total investments.
• He said that revival of private investment along with job creation is his top most priority.