INDIAn economy should cover soon...

The new estimate of the GDP with a revised base year from 2004-05 to 11-12 came out at 6.1% in the quarter ended March 2017, which was along the expected lines, the market was expecting a slowdown in the growth rate, including our former PM Singh who forecasted a 2% drop in the growth. Therefore, nobody is surprised, even the stock-market so far has showed not much correction following the weak GDP figures, probably it had already been accounted and since the remonetisation process has almost been completed, we might expect it to be only a temporary blip which may improve in the next quarters. The slow GDP growth was large anticipated, INDIA is likely to regain the tag of the fastest growing economy soon, again. However, this time the RBI might be forced to cut back on the key rates to increase money-supply and reduce the market rates, as the evidences it sought to act are much clear now and growth expectations must be increased in the unfoldings following the demonetization. The rate of inflation and the rate of growth both have gone down due to fall in demand and spending after the note-invalidation, which must be improved to maintain the GDP growth rate since the economy had been in the rate cut cycle and rate cut transmission by the commercial banks, which the RBI might continue to increase growth and employment hit by the curb on high value notes and money-supply and lack of bank accounts and digital infrastructure. The INDIAn economy yet to fully recover from the previous down-cycle and generate more jobs, the RBI must take the problem of jobs and falling economic-growth seriously, nevertheless people are criticizing the present government for less employment creation, which is actually the RBI’s domain, the bank is more responsible for full-employment, if the government creates employment by public spending it would crowd-out private spending, but spending on the infrastructure might crowd in private investment because of infrastructure deficit. Notwithstanding, the NDA government has increased workdays under MGNREGS and also allocated higher funds, the government is specific about the employment generation potential of the investment projects, 100% FDI in local food and food processing would also create employment through value addition in the agriculture sector, food processing has the potential to create large employment oppourtunities in food and agriculture industry. Food inflation has traditionally been an important source of seasonal inflation in INDIA which has a special place in the RBI inflation expectations scene, however the government’s commitment to mange food supply and also set prices under volatility would also borne fruits in lowering inflation and interest rate to increase investment, employment and growth…