‘Services, agri slowdown, a concern’ 

‘Services, agri slowdown, a concern’ 

Context

Responses to the latest data on GDP growth

Cause of concern

While the rebound in GDP growth in the second quarter can act as a ‘confidence booster’ for the economy, the slowdown in the services sector, including finance, transport and hotels, as well as in agriculture is cause for concern

GST effect

Possible causes for the slowdown include the larger working capital requirements faced by the services sector (especially export-oriented ones) and severe process issues post-GST implementation

Way forward

The monetary policy announcement next week will be a perfect timing to give another shot to boost the sentiment. Also, the government should look at further consolidating its reform agenda in the Union Budget to be announced two months from now to give further boost to investment