“Going forward, given the ongoing trends of structural reforms, coupled with cyclical easing of the monetary policy by further 25 basis points in the current fiscal and range-bound commodity prices, India’s growth is likely to revive to 7.9 percent in 2015-16 and towards 8.1 percent in 2016-17,” the financial services company said in a research note.
According to the firm, investment and consumption uptick is likely to result in a growth pick-up from 7.3 percent in 2014-15.
However, a scarcity of rainfall may affect the growth projection. The Met department has cautioned about a predicted deficit 12 percent in the rains. The private financial institution said it remains “constructive on the structural reform agenda of the government”.
“The less-contentious constitutional amendment Bill for GST is likely to be passed in the next monsoon session (mid-July)”, it said. The report from Citigroup, however noted the passage of the land bill may be a challenge for the government due to a poor monsoon forecast. Citigroup also said the government is currently focusing on institutional reforms, but the impact on growth will be felt over the medium term.