GDP Growth Could Touch 5.9% This Fiscal: Finance Secy

New Delhi
GDP Growth Could Touch 5.9% This Fiscal: Finance Secy

Confident of a rating upgrade, Finance Secretary Arvind Mayaram today said growth rate in the current fiscal will be in range of 5.5-5-9 per cent, exceeding Standard and Poor's estimate of 5.5 per cent.

Global rating agency S&P today raised India's outlook to stable from negative after two-years, but has retained the rating at 'BBB-'.

While revising the outlook, S&P said the rating could be raised if the economy reverts to a real per capita GDP trend growth of 5.5 per cent per year.

"We are very confident that this (GDP growth) will not only be 5.5 per cent, it will be higher than 5.5 per cent. There is case for upwards revision of the credit rating.

"As we have been stating in the past, we believe that the growth this year should be in the region of 5.5-5.9 per cent and therefore there will be a positive review within the course of year," Mayaram said.

The revision in outlook comes just ahead of Prime Minister Narendra Modi's visit to the US, which among things is aimed at attracting investment.

Mayaram further said government is satisfied that the credit rating agency has acknowledged the steps that Centre has taken to improve the economy and specially bring the investment climate back and "therefore the growth is cycle back".

Modi's BJP-led NDA got majority of its after the General Elections that concluded in May. It is after three decades that a single party has managed to get majority at its own.

Meanwhile, Chairperson of country's largest bank SBI Arundhati Bhattacharya said the revision in outlook is a reflection of India's sound external position, supported by robust capital inflows and a benign CAD.

"We also believe that India is well on a path of faster than anticipated fiscal consolidation and it could be a positive surprise going forward," she said.

She further said that with the rating institution indicating a revision in rating conditional on a growth uptick and "our internal prognosis suggesting a strong possibility of the same, we look forward to even better times ahead".

In April 2012, S&P had revised downward India's rating outlook to negative from stable due to declining investors' confidence in the economy under the previous UPA government.

Industry chamber CII said the development will improve investor confidence and improve companies' access to international funds.

Chamber's Director General Chandrajit Banerjee said that CII is certain that the government's determination to move swiftly on areas like GST, containing inflation in food products and achieving a sustained reduction in the fiscal deficit would further help this cause.

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