India’s 2015-16 Economic Growth at 7.9%

I recently came across a statement stating that RBI has forecasted that  2015-16 India’s Economic Growth will be 7.9%. I researched over it that what are the deductions over what basis they are saying so.

Economic growth, calculated in terms of gross value added(GVA), at base price, is expected to increase by 7.9 percent in 2015-16, led by a 10.1 percent growth in service sector, according to RBI’s estimates based on inputs from professional forecasters. Agriculture and allied activities and services are expected to grow by 1.1 percent and 10.6 percent respectively.

In terms of probability, forecasters ascribed maximum 57 percent chance that GVA growth in 2014-15 will be in the range of 7-7.4 percent, and another 27 percent probability that it will be in the range of 7.5-7.9 percent. For the year 2015-16, GVA growth in 7.5-7.9 percent is the most probable outcome.

Private Final Consumption has been projected to increase by 12.9 percent in 2014-15 and further by 13.0 percent in 2015-16. Gross saving rate is projected at 30 percent GNDI in 2014-15 and is expected to improve to 31 percent of gross disposable income in 2015-16. Forecasters expect gross fixed capital formation rate at 28.6 percent of GDP in 2014-15 to 13 percent in 2015-16.

Gross saving rate is expected is projected to grow from 30 percent in 2014-15 to 31 in 2015-16. Both money supply and bank credit growth expectations declined in this round. While money supply (M3) is expected to increase by 12.3 percent in 2014-15 and further by 13.5 percent in 2015-16, bank credit is expected to expand by 12 percent in 2014-15 and further by 14 percent in 2015-16.

Hence, with all these figures we conclude that Indian is awaiting a boom in the economy and move towards development.

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