Commenting on GDP data announced on August 31, Pankaj Patel, President, Federation of Indian Chambers of Commerce and Industry (FICCI) has said that the chamber is bullish that adverse impacts of Goods and Services Tax (GST) on industrial production will wane off in months to come.

“Growth numbers indicate a moderation in agriculture and industrial sectors. The uncertainty surrounding implementation of Goods and Services Tax did impact industrial production in the first quarter, however we are confident that this effect will wane off in coming months. Also, the overall growth conditions remain conducive and a pickup in economic activity can be expected in the second half of this fiscal year,” said Patel.

“A marginal improvement has been reported in fixed capital formation numbers which is positive and is probably supported by the increasing public investments.  However, the persistent slack in private domestic investments remains a concern. The cost of finance for industry remains high. Though the Reserve Bank of India had cut the repo rate by 25 bps in the monetary policy announced earlier this month, a steeper cut at this juncture would have given a stronger signal. A turnaround in domestic private investments is critical to push growth and employment generation in the economy”, he added.

The recently released numbers on August 31 by the Central Statistics Office (CSO) showed that India’s “real” or inflation-adjusted GDP grew at the slowest pace in 13 quarters and is still a long way off from returning to 8 percent growth path, last seen in 2015-16.