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India’s potential growth remains unaltered despite slowdown: CEA

“We aim to create a favourable environment for investment,” CEA said.

ETMarkets.com|
Dec 09, 2019, 01.38 PM IST
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Subramanian expects things to improve soon as the government is taking the necessary steps to spur growth.
NEW DELHI: Chief Economic Advisor KV Subramanian on Monday said though Indian economy is facing a slowdown, the country’s potential growth remains unaltered.

The slowdown is more on the cyclical side, ET Now quoted him as saying. Subramanian expects things to improve soon as the government is taking the necessary steps to spur growth.

“We aim to create a favourable environment for investment,” CEA said.

The slowdown is deeper than anticipated and will be prolonged, ratings agency Crisil has said earlier this month. It also slashed its growth estimate sharply to 5.1 per cent from 6.3 per cent earlier.

Recently, the Reserve Bank of India (RBI) too lowered the growth forecast for the ongoing financial year to 5 per cent from the earlier estimate of 6.1 per cent on account weak domestic and external demand.

The country’s economic growth, according to government data, slipped to a over six-year low of 4.5 per cent in the second quarter of the current fiscal mainly due to contraction in manufacturing sector output.

"Real GDP growth for 2019-20 is revised downwards from 6.1 per cent in the October policy to 5.0 per cent, 4.9-5.5 per cent in H2 (this fiscal) and 5.9-6.3 per cent for H1(2020-21)," RBI said in its fifth bi-monthly monetary policy review.

On the positive side, RBI added that, monetary policy easing since February this year, and the measures initiated by the government over the last few months are expected to revive sentiment and spur domestic demand.
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