Risks remain

Risks remain

News:

1. India economy grew at 8.2 % in Apr-June, but risk remains.

Important News:

2. India economy grew at 8.2 %, fastest pace in 9 quarters.

3. Growth was seen due to strong performance in manufacturing sector.

4. Some Industry wise growth data.

• Manufacturing grew at 13.5 % after shrinking 1.8 % in the first quarter in last year.
• Construction and Agriculture grew at 8.7 % and 5.3 % respectively in 1^st quarter of 2018.

5. Indian Economy had grown just 5.6 % in Q1 of 2017-18 owing effect of GST and Demonetization.

6. However 8 % of growth can be attributed to

• Resolution on GST transition problems.
• Budgetary support to rural economy.
• Effect of lower base rate.
• Government spending made significant contribution.

7. However Indian Finance Minister has raised the concern over the quality of growth due to

• Compromised on Fiscal and Current account deficit leading to inflation.
• GST collection have dipped about Rs.94,000 Crore.
• Rupees depreciation
• High Oil price trends.
• Expanding current account deficit may lead to future inflation in latter half of this year.
• Declined in growth of service sector from last year.

8. RBI has already tighten the monetary policy twice by increasing interest rate.

9. In near future, scope for growth is limited as RBI has adopted hard money policy by increasing the interest rate. Easy money policy helps the economy to grow.

10. Though India is fastest growing economy it needs to grow even faster for job creation.