Economy may grow by over 6.5% in FY18 as inflation eases: Arvind Panagariya

Published On: 03, Dec 2017 | Source:

Noted economist and former vice-chairman of Arvind expects the economy to grow by over 6.5 per cent in the current financial year.

He said the macroeconomic indicators have remained stable for the past three years with hovering around one per cent and inflation moderating.

"Expectations of implementation of the goods and services tax (GST) beginning July 1, 2017 led to some disruptions in supply during the April- June quarter with the quarterly growth rate declining to 5.7 per cent," said.

"But we should see recovery coming our way with the growth rate during 2017-18 reaching 6.5 per cent or higher," he said.

pointed out that a recently released report makes a plausible case that the economy will accelerate to 8 per cent growth in 2018-19.

Reversing a five-quarter slide in gross domestic product (GDP) growth, the bounced back from a three-year low to expand by 6.3 per cent in July-September as manufacturing revved up and businesses adjusted to the new tax regime.

On whether the government could relax target to boost the economy, said: "Personally, I do not believe that the Finance Minister and the Prime Minister would let their hard-fought success in achieving significant progress in fiscal consolidation slip past them at this late stage in the game."

When asked whether the Modi government would go populist in its last regular to be presented in February next year, said he hoped that populism, if any, takes the form of one-time sops and not long-term programmes that are against national interest and politically risky to withdraw afterwards.