GDP to grow @ 8.5 percent aided by Good monsoon: Jaitley

Union Finance Minister Arun Jaitley’s comment on the possibility of revising the GDP growth rate to 8-8.5 percent for 2016-17 from 7.5 percent contingent to the above normal monsoon will help maintain the current bullish sentiment on Indian equity markets. Good 7.5 percent GDP growth is expected as per the IMF reports and the Economic Survey Report.

India Meteorological Department, only last week said that there is a good probability of above normal rainfall this season at 106 percent of the long period average and that the rainfall will be spread across geography. IMD statement cheered the markets up, especially the agri related stocks which clearly outperformed the markets.

While acknowledging the concerns on quality of bank balance sheet in India, over leveraging by corporates, global slowdown and demand contraction locally, Arun Jaitley was hopeful of lower interest rate scenario aided by lower inflation. With above normal monsoon Jailtey hoped the GDP can grow at an accelerated pace and lower interest rate will have a positive impact on the overall productivity.

Finance Minister while interacting with Foreign Portfolio Investors in New York explained his government’s strategy to address the issues of stressed assets affecting banks which are concentrated in six sectors viz., steel, power , textile , sugar, highway and Infrastructure sector.