The Indian economy is seeing broad-based improvement across all sectors and should clock 7 per cent growth in the second half of the current fiscal, top banker Chanda Kochhar said today. Here to participate in the World Economic Forum’s (WEF) annual meeting, to be addressed by Prime Minister Narendra Modi and other world leaders, the ICICI Bank chief said the full fiscal GDP growth for 2017-18 should also be in excess of 6.5 per cent.
Asked about her message to the world at Davos, Kochhar told PTI in an interview that things are turning around very clearly and there are broad improvements across several sectors. Brushing aside any concerns about slowing growth rate, she said the CSO has estimated 6.5 per cent GDP growth and 6.1 per cent gross value add (GVA) growth in the current financial year ending March 31.
“Given that GDP growth in the first half was 6 per cent, this estimate already indicates a robust positive momentum in growth to 7 per cent in the second half of the (financial) year. High frequency indicators are already showing signs of improvement,” she said. “For consumption related areas, a favourable trend is visible in IIP data on consumer non-durables, personal loan growth, domestic passenger traffic, automobile sales and two wheeler sales,” she added.
On the industrial front, manufacturing PMI, credit to industry and manufacturing sector IIP have shown marked improvement in recent months, Kochhar said. On the external front, trade growth is higher compared to last year and India’s forex reserves build-up now provides a robust import cover for over 12 months, she said.
“We are even more optimistic and expect growth to be higher than 6.5 per cent in 2017-18. This will be supported by renewed build-up of supply chains, improved consumption demand and better export performance. We expect growth on GVA basis to be at 6.4 per cent which is higher than what the CSO currently expects,” she said.
On India’s message to Davos leaders, Kochhar said, “We can confidently say that growth is expected to pick up from here on.”
The eminent banker also said that in the last four years, India has taken a comprehensive approach and worked on multiple fronts, including economic, social and institutional reforms that will yield dividends in the long run and ensure a sustainable high growth path. Further, reforms have accelerated the process of formalisation of the economy and India is transforming and is in a strong position to become the fastest growing large economy in the world, she added.