Rating agency Crisil Research in its revised estimate released today lowered India's GDP growth to 5.5% from its previous June's forecast of 6.5%. The rate of inflation based on WPI (wholesale price index) for March 2013 too has been revised up to eight per cent from earlier seven per cent.
In a statement issued by Crisil said that “The forecast has been scaled down in view of deficient rainfall and deterioration in the Eurozone growth outlook. The forecast for other macroeconomic parameters have also been revised. The downward revision in India's growth forecast factors in the adverse impact of rainfall deficiency ~ an expected deficieny of 15% for June to September as per IMD's statement of 2 August ~ and worsening Eurozone growth outlook in 2012 which according to Standard and Poor's estimates will decline to (-)0.6% from earlier zero per cent.”
Not withstanding the Crisil forecast, Dalal Street opted to depend more on the Union finance minister Palaniappan Chidambaram's statement on Monday that he would strive to bring the fiscal deficit down and would address the tax worries of off-shore investors who due to risk aversion are avoiding fresh investment in India equities as well as in other sectors. The markets widely welcomed the first assurance coming from Mr Chidambaram who returned as the Union finance ministry.
Crisil's revised forecast was received late by Dalal Street to have any impact on today's trading. Dalal Street analysts say if Mr Chidambaram takes a few fresh initiatives, the Reserve Bank of India will also review its stance and may announce cut in policy rates ahead of its next review of credit and monetary policy.
In Crisil's view monetary and fiscal policy can create some upside provided swift policy actions to solve issues related to mining, land acquisition and speedy clearance of projects” are taken.
Source - Statesman News Service
In a statement issued by Crisil said that “The forecast has been scaled down in view of deficient rainfall and deterioration in the Eurozone growth outlook. The forecast for other macroeconomic parameters have also been revised. The downward revision in India's growth forecast factors in the adverse impact of rainfall deficiency ~ an expected deficieny of 15% for June to September as per IMD's statement of 2 August ~ and worsening Eurozone growth outlook in 2012 which according to Standard and Poor's estimates will decline to (-)0.6% from earlier zero per cent.”
Not withstanding the Crisil forecast, Dalal Street opted to depend more on the Union finance minister Palaniappan Chidambaram's statement on Monday that he would strive to bring the fiscal deficit down and would address the tax worries of off-shore investors who due to risk aversion are avoiding fresh investment in India equities as well as in other sectors. The markets widely welcomed the first assurance coming from Mr Chidambaram who returned as the Union finance ministry.
Crisil's revised forecast was received late by Dalal Street to have any impact on today's trading. Dalal Street analysts say if Mr Chidambaram takes a few fresh initiatives, the Reserve Bank of India will also review its stance and may announce cut in policy rates ahead of its next review of credit and monetary policy.
In Crisil's view monetary and fiscal policy can create some upside provided swift policy actions to solve issues related to mining, land acquisition and speedy clearance of projects” are taken.
Source - Statesman News Service
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