India’s GVA growth may rise to 6.3 pc in Sep quarter: Nomura

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Mains Paper 3: Economy | Growth

From UPSC perspective, the following things are important:

Prelims level: GDP, GVA, Monetary policy

Mains level: Effect of demonetization as well as remonetization on economy


News

Rebound expected in the Indian economy

  1. The Indian economy is expected to see a rebound in the July-September quarter of this year
  2. GVA growth rate would be 6.3 percent, says a Nomura report

Recovery underway

  1. Nomura’s proprietary indices suggest that growth bottomed out in the second quarter
  2. A recovery is underway in the third quarter, largely because consumption and investment indicators have improved in the third quarter
  3. Rural consumption indicators such as tractor and two-wheeler sales picked up sharply ahead of the festive season, despite weak monsoon, likely reflecting improving cash levels with remonetization
  4. Urban consumption indicators such as passenger vehicle sales and consumer credit also improved in the September quarter, relative to June quarter

Annual growth figures

  1. For this financial year, Nomura expects a GVA growth of 6.4 percent, slightly lower than the RBI’s forecast of 6.7 percent
  2. This is  partly because it expects the government to cut spending due to fiscal constraints

Stance on Monetary policy

  1. It expects rates to stay unchanged in the base case
  2. This is due to incremental growth momentum headed higher, core inflation above 4 percent and fiscal risks on the horizon
Economic Indicators-GDP, FD,etc
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