As economic growth slowed to 7.1 per cent in the first quarter, India Inc on Wednesday said it expects economy to grow at a healthier pace in coming quarters on the back of a good monsoon even as a pick-up in investments remains elusive.
"We expect growth to gain momentum in the second half of the current fiscal year. The good monsoon is a huge positive and an improvement has been noted in the kharif acreage," Ficci President Harshvardhan Neotia said.
He said the agriculture sector performance is likely to pick up, giving an impetus to rural consumption. Also, the Seventh Pay Commission is expected to push demand and the uptick is likely to give a thrust to industrial growth as well.
According to Assocham Secretary General DS Rawat, while a durable pick-up in investment activity remains elusive, consumption will continue to provide the main support to aggregate demand and Indian economy may grow at a healthier pace in coming quarters.
This, he said, will be through a boost from revival of rural demand following an above-normal monsoon, implementation of the 7th Pay Commission recommendations which will further stoke consumer demand and benefits arising from recently passed the GST legislation.
Economy grew at the slowest pace in last six quarters at 7.1 per cent in April-June of the current fiscal, mainly on subdued performance of mining, construction and farm sectors.
GDP had recorded 7.5 per cent growth in April-June of last fiscal and 7.9 per cent in January-March. The previous low was 6.6 per cent in October-December of 2014-15.
According to the data released by the Central Statistics Office (CSO), the Gross Value Added (GVA), which is estimated at the basic price, showed a growth of 7.3 per cent in the first quarter of 2016-17.