July 4, 2019 / 7:42 AM / 3 months ago

Highlights: India's economic growth to hit 7% this fiscal year - Economic survey

NEW DELHI (Reuters) - India predicted on Thursday that economic growth in the current fiscal year could rise to 7.0% from the 6.8% for the year that ended March 31, which was the slowest pace in five years.

Women carry firewood on iron beams laid over a canal next to the construction site of a metro rail station in Kolkata, India, March 29, 2019. REUTERS/Rupak De Chowdhuri/File Photo

The government’s economic survey, presented to parliament on Thursday, said India will face a challenge on the fiscal front following an economic slowdown impacting tax collections amid rising state expenditure on the farm sector.

However, the investment rate was expected to pick up following improvement in consumer demand and bank lending, the report said.

Here are the highlights of the report:

GROWTH

* 2019/20 GDP growth will pick up on higher private investment and robust consumption

* 2019/20 GDP growth seen at 7 pct y/y

* 2018/19 growth rate for agriculture, forestry and fishing sector growth seen at 2.9%

* Lower global oil prices will boost consumption

* Lower global growth, increased uncertainty over trade tensions could hit exports

FISCAL DEFICIT

* Fiscal deficit pegged at 3.4% of GDP for 2018-19

* Revised glide path projects fiscal deficit of 3% of GDP by FY2021

* Slow growth, goods and services tax, farm schemes will all pose challenges on the fiscal front

* There are apprehensions of slowing growth, which will have implications for revenue collections

* 2018/19 forex reserves seen at $412.9 bln, down from $424.5 bln in previous year

* Imports slated to grow at 15.4% while exports projected to grow at 12.5% in 2018/9

INFLATION

* Average inflation in the last 5 years was less than the inflation level of the preceding 5 years, matching the lowest levels attained in the country’s post-independence history

* Core inflation averaged higher than last year

* 2018/19 saw low headline as well as food inflation

* Deflation in the prices of pulses, vegetables and sugar

* Rural wage growth, that had bottomed out, has been rising since mid-2018

Reporting by Alasdair Pal; Editing by Sanjeev Miglani

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