International rating agency Fitch Ratings has cut the forecast of the country's economic growth rate to 6.80% for the next financial year i.e., 2019-20. Prior to this, Fitch had released an estimate of 7 percent growth.
The rating agency said in its global economic scenario, "Even though we have reduced the forecast of economic growth rate for the next financial year due to the low growth expected in the economy, even after the country's gross domestic product (GDP) 6.8 percent in 20 and financial the year 2020-21 will increase at 7.10 percent. Fitch in December last year had reduced the economic growth rate from 7.8 percent to 7.2 percent for the current fiscal.
According to PTI, Fitch said, "We have changed our scenario about the base rate and we expect a further reduction of 0.25 percent in the base rate due to relatively less global monetary conditions and the scope of inflation. is.' According to Fitch, the Reserve Bank adopted a more liberal monetary policy and cut interest rates by 0.25 percent in February. The Reserve Bank has been comfortable with inflation due to persistent inflation. Talking about the financial front, the new budget emphasizes the increase in cash transfers to the farmers. Fitch said that the price of oil prices will be favorable and the expected increase in food prices in the coming months can increase the income and consumption of rural households.
It is worth mentioning that many prominent economists had expressed concern with the RBI chief earlier about slowing the pace of the Indian economy. The Economist had met the Governor of the Reserve Bank of Rajasthan Shantikant Das and said that such a monetary policy would have to be brought in by which the pace of the economy would be revived.
There will be a meeting of the Reserve Bank of Monetary Policy Committee on April 4, in which the monetary policy will be finalized for the new fiscal year. In the October to December quarter, the Indian economy has grown at just 6.6 percent, which is the lowest growth rate in the last five quarters. Weak consumer demand and low investment are being considered for this reason.
PM Modi is very zealous in the election campaign and once again he is putting all his strength to return to power, in such a situation, the slowing of the economy is being considered as a point of concern. Due to the slowing of the economy, the tax collection can be lower than the target and government expenditure may slash down.
