The Industry body, Federation of Indian Chambers of Commerce and Industry (FICCI) in its latest Economic Outlook Survey has forecasted India's gross domestic product (GDP) growth at 7.4% for the financial year 2017-18, with a minimum and a maximum range of 7.0% and 7.6% respectively. Based on the survey that was conducted from economists belonging to the industry, banking and financial services sector, the growth will be supported by the agriculture sector which is estimated to clock 3.5% growth and improvement in the performance of the industry and services sector. The industry and services sector are also expected to grow by 6.9% and 8.4% respectively in FY18.
However, the economists participating in the Survey forecasted the country's GDP growth for 2016-17 to be between 6.6% and 7.1%, with some even anticipating the fourth quarter (January-March) economic growth to be lower than the previous quarter numbers. The participants also felt that with the process of re-monetisation almost complete, consumption activity witnessed an uptick and will further build up going ahead.
According to the Economic Outlook Survey results, Consumer Price Index has a median forecast of 4.8% for 2017-18 with a minimum and maximum level of 4.0% and 5.3% respectively. The wholesale price index based inflation rate is projected at 5% in 2017-18, with a minimum and maximum range of 3.6% and 5.9% respectively. Besides, a majority of the economists participating in the survey were supportive of the idea of Universal Basic Income. The respondents felt that UBI can be an efficient framework which would help reduce poverty and transfer the choice/decision to spend on the individual. It would also promote labor market flexibility as individuals can enter the labor market without the fear of losing the benefits.
As per the survey report, economists participating in the survey unanimously believed that protectionism is becoming a new normal led by certain advanced economies which are increasingly looking inwards to propel growth and increase employment. According to some of the respondents, this could result in increased tension between nations which could lead to trade wars. The economists also felt that while protectionism is a challenge, India needs to keep its focus on implementing reforms. The situation calls for improving the investment climate in the country, enhancing hard and soft infrastructure and continuing the efforts on tackling the issue of non-performing assets.
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