India Ratings expects India’s economy to expand 7.7% this fiscal year, faster than the previous year’s estimated expansion of 7.4%, because of a pickup in private consumption.
“A significant moderation in inflation and inflationary expectations is likely to boost consumer sentiments, albeit gradually,” the ratings firm said in a news release. India Ratings is an associate of global ratings firm Fitch.
“Even investment and government expenditure would provide adequate support to consumptionled GDP growth,” it said. It expects the government’s ‘Make in India’ initiative to improve ‘ease of doing business’. This, coupled with the successful auction of coal mines, will push industrial growth to 6.5% in fiscal 2016 from the estimated 5.9% growth in fiscal 2015, it added. The ratings firm expects the farm sector to grow 2.1%, but a subnormal monsoon could slow the pace.