<p class="title">India's economic growth is set to bounce back to 7.1% next fiscal, from the estimated 6.5% in 2017-18, aided by robust consumption demand, rating agency Ind-Ra said on Thursday.</p>.<p class="bodytext">Ind-Ra, an affiliate of US-based Fitch, said it expects greater allocation of funds to farm and rural sectors in 2018- 19 Budget, which is unlikely to be a populist one despite the impending 2019 general election.</p>.<p class="bodytext">In its outlook for 2018-19, the agency projected average retail inflation at 4.6% and said inflation trajectory has reversed on rising commodity, especially crude oil prices.</p>.<p class="bodytext">"Days of RBI reducing rate are over. Now the question is when it will raise rates. However, they will wait for 6-8 months before raising policy rates to better gauge the inflation trajectory," India Ratings & Research (Ind-Ra) Principal Economist Sunil Kumar Sinha told reporters here.</p>.<p class="bodytext">The 7.1% gross domestic product (GDP) growth projected for 2018-19 is a tad lower than the forecast of 7.3% and 7.4% by the Asian Development Bank (ADB) and International Monetary Fund (IMF), respectively. The World Bank too has projected a 7.3% growth for India in 2018.</p>.<p class="bodytext">Ind-Ra said demonetisation and implementation of Goods and Services Tax (GST) have led to deceleration of growth to 7.1% in 2016-17 and further to 6.5% in 2017- 18.</p>.<p class="bodytext">"While the implementation of GST is likely to benefit the economy over the medium to long term, the same cannot be said about the impact of demonetisation," it said.</p>.<p class="bodytext">A gradual pick-up in growth momentum can be expected going forward as structural reforms like GST and Insolvency and Bankruptcy Code (IBC) take shape, Ind-Ra said.</p>.<p class="bodytext">The agency said it expects fiscal deficit in current financial year ending March to come in at 3.5%, overshooting the budget estimate of 3.2%.</p>.<p class="bodytext">"Despite 2018-19 being a pre-election year, Ind-Ra does not expect the Union Budget to be a populist budget. However, it expects some expenditure reallocation with an increased focus on the rural and agriculture sectors," it said.</p>.<p class="bodytext">The agency expects fiscal deficit in 2018-19 to be at 3.2%, higher than 3% stated in the medium-term fiscal policy statement.</p>.<p class="bodytext">Ind-Ra said while the Union Budget could see the Centre focusing on structural reforms to boost farm productivity, the states in their respective Budgets could give out doles in the run-up to the general election in 2019. A mix of global and domestic factors will keep the Indian rupee range bound at average Rs 66.06/USD in 2018-19, it said. </p>
<p class="title">India's economic growth is set to bounce back to 7.1% next fiscal, from the estimated 6.5% in 2017-18, aided by robust consumption demand, rating agency Ind-Ra said on Thursday.</p>.<p class="bodytext">Ind-Ra, an affiliate of US-based Fitch, said it expects greater allocation of funds to farm and rural sectors in 2018- 19 Budget, which is unlikely to be a populist one despite the impending 2019 general election.</p>.<p class="bodytext">In its outlook for 2018-19, the agency projected average retail inflation at 4.6% and said inflation trajectory has reversed on rising commodity, especially crude oil prices.</p>.<p class="bodytext">"Days of RBI reducing rate are over. Now the question is when it will raise rates. However, they will wait for 6-8 months before raising policy rates to better gauge the inflation trajectory," India Ratings & Research (Ind-Ra) Principal Economist Sunil Kumar Sinha told reporters here.</p>.<p class="bodytext">The 7.1% gross domestic product (GDP) growth projected for 2018-19 is a tad lower than the forecast of 7.3% and 7.4% by the Asian Development Bank (ADB) and International Monetary Fund (IMF), respectively. The World Bank too has projected a 7.3% growth for India in 2018.</p>.<p class="bodytext">Ind-Ra said demonetisation and implementation of Goods and Services Tax (GST) have led to deceleration of growth to 7.1% in 2016-17 and further to 6.5% in 2017- 18.</p>.<p class="bodytext">"While the implementation of GST is likely to benefit the economy over the medium to long term, the same cannot be said about the impact of demonetisation," it said.</p>.<p class="bodytext">A gradual pick-up in growth momentum can be expected going forward as structural reforms like GST and Insolvency and Bankruptcy Code (IBC) take shape, Ind-Ra said.</p>.<p class="bodytext">The agency said it expects fiscal deficit in current financial year ending March to come in at 3.5%, overshooting the budget estimate of 3.2%.</p>.<p class="bodytext">"Despite 2018-19 being a pre-election year, Ind-Ra does not expect the Union Budget to be a populist budget. However, it expects some expenditure reallocation with an increased focus on the rural and agriculture sectors," it said.</p>.<p class="bodytext">The agency expects fiscal deficit in 2018-19 to be at 3.2%, higher than 3% stated in the medium-term fiscal policy statement.</p>.<p class="bodytext">Ind-Ra said while the Union Budget could see the Centre focusing on structural reforms to boost farm productivity, the states in their respective Budgets could give out doles in the run-up to the general election in 2019. A mix of global and domestic factors will keep the Indian rupee range bound at average Rs 66.06/USD in 2018-19, it said. </p>