New Delhi, September 18 (Daily Kiran) : India’s real GDP growth is projected to reach between 6.5% and 7% in the current fiscal year, according to a report released by Jefferies. This growth is attributed to robust domestic demand, a surge in bank lending, and a rebound in economic activities. The report also anticipates nominal GDP growth to hover around 11% to 12%.
In its latest “Greed and Fear” report, Jefferies noted that India’s economic performance has surpassed expectations from six months ago. This improvement is largely due to a significant expansion in lending and positive indicators related to demand.
The report highlighted that bank credit growth accelerated to 17.8% year-on-year in July. Loans to micro, small, and medium enterprises (MSMEs) grew by 24.9%, while the industrial sector saw a 20% increase in loans, the service sector 22.9%, and corporate loans rose by 21.6%.
Jefferies’ head of India research, Mahesh Nandurkar, remarked that income growth is expected to rise from 14% in the current fiscal year to 17% in the next fiscal year starting April 1.
The report also pointed to sustained strength in domestic demand. Additionally, Goods and Services Tax (GST) collections rose by 14.8% year-on-year in August, and electricity demand increased by 9.4% during the April-August period, compared to a mere 1.8% growth in the January-March quarter.
Moreover, the report indicated a strong inflow of foreign currency under the Reserve Bank of India’s Foreign Currency Non-Resident (FCNR(B)) initiative, with the government attracting an impressive $136 billion in deposits from non-resident Indians (NRIs).
On the fiscal front, Jefferies noted that the government’s efforts towards fiscal consolidation are progressing positively. The fiscal deficit is expected to remain at 4.3% of GDP this fiscal year, with further reductions anticipated in the coming years.
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