WEB DESK
If analysts at CLSA are believed, India’s growth in the real gross domestic product (GDP) for the financial year 2019-2020 (FY20) could slip to 5 per cent with risks to the downside. Their worst-case scenario is 50 basis point (bps) lower than this projection at 4.5 per cent.
“India is in the middle of a severe credit contraction that started with the liquidity squeeze triggered by the crisis in the non-bank finance companies (NBFCs), which has now spread to deposit-taking companies as well. India is growing below historical trend and there will be some pressure on broad consumption aggregates. Modi’s corporate tax cuts are bold but will take time to gain traction. India’s recovery will be postponed to late 2020,” said Eric Fishwick, chief economist at CLSA, reports Business Standard.
The recent economic data, too, has been worrisome. Index of Industrial Production (IIP) contracted by 4.3 per cent in September, the lowest in nearly eight years. The fall was steeper than the 1.4 per cent cut seen in August.