GST will help Indian economy gallop ahead: FICCI prez

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New Delhi, Jul 19: Despite some short-term challenges such as increasing retail inflation and declining industrial output, the Indian economy is poised to accelerate to about 7.5% in the ongoing financial year 2018-19 from 6.6% in 2017-18 and improve even further in the coming years on the back of GST reforms, said FICCI’s President Rashesh Shah.
The Reserve Bank of India is keeping tab on inflation and both the government and the apex bank will take necessary measures to keep it at the manageable levels, Rashesh Shah said in a statement. Industrial output growth is also expected to bounce back in the next few months.
Industrial production declined to a seven-month low of 3.2% in the month of May, on account of sluggish performance of manufacturing and power sectors, while retail inflation also spiked to a five-months high of 5% in June, due to costlier fuel.
The goods and service tax (GST) will play a vital role in bolstering the GDP growth of the country further. “While the GST collection trends clearly indicate towards a positive sentiment in the economy, the national integrated indirect tax structure will also bring down inflation, going ahead,” said Shah.
Apart from this, other reform measures taken by the government including IBC and RERA have already started yielding good results and are expected to revive and boost GDP growth beyond 8%, he added.
Recently, India became world’s sixth-largest economy, pushing past France, according to the updated World Bank figures for 2017. India’s GDP stood at $2.597 trillion at 2017 end compared with $2.582 trillion for France. On the other side, the US remains the world’s largest economy followed by China, Japan, Germany and Britain, AFP reported.
In April this year, the International Monetary Fund (IMF) projected India to grow at 7.4 per cent in 2018 and 7.8 percent in 2019, leaving its nearest rival China behind respectively at 6.6 and 6.4 percent in the two years.