'Economy in pronounced slowdown, may grow at 6.8% this fiscal'

The Indian economy is undergoing a pronounced economic slowdown and is likely to clock a GDP growth of 6.8 per cent in the current financial year, a report by Ambit Capital Research said.

According to the research note, the GDP growth this financial year is likely to be lower than 2014-15.

“We reiterate our point of view that GDP growth in India is likely to remain under pressure in the immediate term. In specifics, we expect GDP growth to be recorded at 6.8 per cent in 2015-16 (as against 7.2 per cent in 2014-15),” the report added.

The Ambit Capital’s Ke-qiang Index comprising ‘real’ economy indicators for October-December points to weak economic momentum. India’s Ke-qiang Index (IKI) was first launched on September 29, 2015.

The index tracks ‘real’ economy indicators such as auto sales, cargo volumes handled, capital goods’ imports and power demand.

The report noted that if the new GDP series did not exist and the IKI index is used to estimate the pace of growth in the real economy as per the old GDP series, October-December quarter GDP would be 5.4 per cent (as against the 7.3 per cent on the new series).“This indicator confirms our view that the Indian economy is undergoing a pronounced economic slowdown,” the report added.

According to official data, Indian economy is expected to record a 5-year high growth rate of 7.6 per cent in 2015-16 on improved performance in manufacturing and farm sectors.

According the Central Statistics Office (CSO), the gross domestic product (GDP) growth is estimated at 7.3 per cent in the December quarter of this fiscal.