India’s GDP Growth pegged at 7.9 Percent: Citigroup

Backed by structural reforms and cyclical easing of the centre’s monetary policy, the GDP growth in India is likely to revive to 7.9 percent during 2015-16 and head further up to 8.1 percent in 2016-17, a report from Citigroup said.

“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.