RBI Governor Urjit Patel feels that GDP growth will pick up in the third and fourth quarters (of the current fiscal year) to above 7 per cent. In an interview to Mint, the Governor has said though there is a drop in GDP growth in the June quarter (to 5.7 per cent), the transitory effects relating to GST must be taken into account. Patel’s comments come in the backdrop of lower growth forecast by the RBI and opposition claiming that there is a climate of worry surrounding the economic growth of India. Last week, the RBI kept its repo rate unchanged at 6.00 per cent, and raised inflation projections.
Patel has suggested that there is an upturn in the economy. “The Nikkei India Services PMI Business Activity Index rose more than 3 percentage points in September over August; the core sector IIP (Index of Industrial Production) saw a 4.9 per cent rise in August,” he was quoted as saying by the Mint. Patel also said there is an upturn in the automobile and two-wheelers sales. On the recent monetary policy where the rates remained unchanged, Mint quoted Patel as saying, “Growth is always there in the MPC’s scheme of things; we don’t lose sight of that, but not at the cost of inflation.”