The implementation of GST may eventually augur well for the Indian economy, but for now, the scenario is not indicative of "achche din" (good days) for agriculture industry, though a GDP growth rate of 7.6 per cent has been predicted for 2016-17 by the National Council of Applied Economic Research.
In its quarterly review of the current fiscal, the independent economic think tank has forecast a 72 per cent growth in Gross Value Added (GVA), and a wholesale price index of 2.8 per cent.
Agriculture at 4.1 per cent, GVA trails behind industry at 7.1 per cent and services at 7.9 per cent. While imports in dollar terms grew at 2.5 per cent, exports registered a negative growth rate of -8.0 per cent.
It has not been hunky-dory for industrial sector, where the Index of Industrial production showed a negative growth of - 0.1 per cent on a year-over-year (Y-oY) basis. This, according to the review, was driven by slow and uneven negative growth in manufacturing (-1.5 per cent). Capital goods suffered double-digit fall in the first two months of the current fiscal indicating weak investment activity in the economy (-18.9 per cent) .
Consumer durables growth, however, continued to exhibit strong growth (8.9 per cent on a Y-o-Y basis). The index of eight core industries grew by 5.4 per cent in 2016-17:Q1 versus 2.5 per cent in 2015-16:Q1.
The only redeeming aspect of agriculture was the last year's monsoon rainfall deficiency did not impact the output of foodgrains. Commercial crops, however, took a hit.
In the services sector, 7. 5 per cent more tourists arrived in India, and domestic air traffic saw a rise of 20.4 per cent. Production of commercial vehicles rose by 17.3 per cent, but bank credit to commercial sector stagnated between 8.8 and 8.9 per cent, and aggregate deposits slowed down to 9.1 per cent.
The slowdown in imports was mainly due to reduction in oil imports that reduced by 23.6 per cent (Y-o-Y) in 2016-17:Q1. Non-oil imports declined by 11.5 per cent (Y-o-Y) in 2016-17:Q1.
The fiscal deficit touched 61 per cent of the budget estimate in 2016-17:Q1, as against 51.2 per cent in 2015-16:Q1.