Amid the global slowdown, Indian economy
seems to be gaining strength day by day, justifying the title of being the
world’s fastest growing major economy, as strong macroeconomic fundamentals, favourable
business sentiments and downward trend in interest rates are significantly
supporting the Asia’s third biggest economy.
Indian services activity expanded at a
quicker pace in the month of March driven by a marked acceleration in new
business, signaling strong underlying demand in Asia’s third biggest economy
which is withstanding a global slowdown.
The Nikkei India Services Business Activity
Index climbed to 54.3 in March from 51.4 in February, with a reading above 50
signaling expansion.
Climbing to the highest level in 37 months,
the composite gauge measuring manufacturing and services in India climbed at
54.3 in March from 51.2 in February driven by faster increases in both the
sectors.
Further, the government’s vow to stick to
its budget deficit goals, easing inflation and a recent reduction in the
interest rates on small savings instruments gave the Reserve Bank of India
(RBI) additional room to bolster monetary easing in a bid to buoy demand and
encourage investments in the country’s economy.
As expected RBI delivered an interest rate
cut, its first in six months while signaling a continued accommodative monetary
policy stance to help power growth in Asia’s third biggest economy. The central
bank lowered the repo rate by 25 basis points to the lowest level since March
2011 at 6.5 per cent from 6.75 per cent.
The RBI kept unchanged its gross-value
added growth projection for FY 2017 at 7.6 per cent while inflation is expected
to decelerate at a modest rate to hover around the 5 per cent mark through
March 2017.
Going forward, policy reforms initiated by
the government, lower interest rates and a surge in investment activity would
be the key triggers in propelling the economy on an upward trajectory.
Latin Manharlal
No comments:
Post a Comment