Noted economist and former vice chairman of Niti Aayog Arvind Panagariya expects the economy to grow by over 6.5% in the current financial year. He said the macro-economic indicators have remained stable for the past 3 years with current account deficit hovering around 1% and inflation moderating.
"Expectations of implementation of the GST beginning July 1, 2017 led to some disruptions in supply during the April- June quarter with the quarterly growth rate declining to 5.7%.
"But we should see recovery coming our way with the growth rate during 2017-18 reaching 6.5% or higher," he told PTI in an interview.
Panagariya pointed out that a recently released Goldman Sachs report makes a plausible case that the economy will accelerate to 8% growth in 2018-19.
Reversing a five-quarter slide in GDP growth, the Indian economy bounced back from a three-year low to expand by 6.3% in July-September as manufacturing revved up and businesses adjusted to the new GST tax regime.
On whether the government could relax fiscal deficit target to boost economy, Panagariya said: "Personally, I do not believe that the Finance Minister and the Prime Minister would let their hard-fought success in achieving significant progress in fiscal consolidation slip past them at this late stage in the game."