Indian Economy is on right track: Piyush Goyal

India has retained the fastest growing economy tag clocking a stellar 7.7 % in fourth quarter of the FY18. But this did not prevent GDP growth, at 6.7% in 2017-18, from falling to its lowest rate in four years.

India's gross domestic product grew by 7.7% in the quarter ended March, the government said Thursday.

Last year, it reported 6.1 percent growth in GDP for the fourth quarter of 2016-17. India's GDP grew at the fastest pace in seven quarters at 7.7 per cent in January-March. Moreover, the improvement in the construction GVA growth in Q4 FY2018 benefitted from the base effect, given the issues related to demonetisation, including the availability of labour, Nayar said. The sharp uptick in the construction GVA growth in Q4 FY2018 benefited from the trend in its inputs, such as cement and steel consumption, and activity in the infrastructure sector (including affordable housing), even as real estate and industrial capex is yet to pick up and consumer sentiment is yet to recover appreciably. This was also seen in the constructive GVA which saw a growth of 11.5 percent year-on-year during the quarter.

"We expect FY19 credit growth to improve marginally to 12-13 percent with private sector banks leading the improvement, with public sector banks being constrained by capital requirements and resolution of stressed corporate loans". The Q1 GDP data should give the monetary policy committee enough comfort (on growth) to focus on upside inflation risks.

"While Indian economy is in cyclical recovery led by both investment and consumption, however, higher oil prices and tighter financial conditions will weigh on the pace of acceleration", Assocham secretary general D S Rawat said.

DOWNSIDE RISKS: The recovery could be threatened by higher global crude oil prices, which this month hit $80 a barrel, their highest since 2014.

Moody's forecasted a 3.3 per cent and 3.2 per cent growth for G-20 countries in 2018 and 2019 respectively while claiming that the growth differential between emerging and advanced economies were set to broaden, with the advanced economies growing 2.3 per cent in 2018 and 2.0 per cent in 2019.

Chief Economic Adviser Arvind Subramanian, who also present at the press meet, said "the impact of GST is behind us".

He said the income that would be generated from HSR-linked development projects far exceeded that of ticket sales, which included an increase in property value, the creation of 442,000 job opportunities, technology transfer, rapid local economic growth and tourism.