Ficci Survey Projects FY20 GDP Growth At 5%, To Improve To 5.5% In FY21
The Federation of Indian Chambers of Commerce and Industry on Wednesday said its Economic Outlook Survey has projected the country's annual median gross domestic product growth for 2019-20 at 5 percent, in line with the projections made by the National Statistical Organisation.
The survey has put the median growth forecast for agriculture and allied activities at 2.6 percent for 2019-20, the industry and services sector at 3.5 percent and 7.2 percent, respectively, during the current year.
"Growth is likely to improve to 5.5 percent in 2020-21 as per the projections," the survey said.
Further as per the survey, the economic growth has been pegged at 4.7 percent for the third quarter of 2019-20.
The survey was conducted during December and January 2019-20 among economists belonging to the industry, banking and financial services sector, Ficci said.
As per the first advance estimates of the national income released by the NSO, India's GDP growth is seen dipping to an 11-year low of 5 percent in the current fiscal, mainly due to poor showing by manufacturing and construction sectors.
The survey further said concerns remain on external front with exports projected to contract in 2019-20.
Merchandise exports are expected to decline by 2.1 percent, while imports are expected to decline 5.5 percent during the year, it said.
Moreover, median current account deficit forecast was pegged at 1.4 percent of GDP for 2019-20.
"Moderation in global growth forecast, escalating geo-political tensions, and uncertainty around trade deal between U.S.-China and Brexit outcome still form major risk factors to India's growth in 2020," it said.
Participating economists said that a shortfall in government's revenue collections seems imminent this year on the back of lower than anticipated nominal growth.
To augment government's revenue collections, they called for measures to boost the country's nominal GDP growth.
Citing weak consumption demand as a major impediment to India's growth, economists cautioned against any changes in the Goods and Services Tax rates to improve revenue collections as it would prove to be counterproductive, Ficci said.
Economists recommended undertaking expansionary fiscal and monetary policies along with a slew of reforms to tackle the structural problems facing the economy.