INSUBCONTINENT EXCLUSIVE:
New Delhi: Crisil Rating on Monday sharply cut India's growth outlook for fiscal 2020 to 5.1 per cent from 6.3 per cent, citing a dip in
fixed investment, weak private consumption growth, weak growth in tax collections and industrial production among others.A major worry,
Crisil said, is the sharp fall in nominal growth to 6.1 per cent in second quarter of current financial year - the lowest in the new GDP
"We expect nominal GDP this fiscal to average 8.9 per cent as against the budget estimate of 12 per cent
This will impact tax collection and fiscal ratios."Crisil's sharp downward revision of growth outlook comes just ahead of the RBI's three
day long monetary policy committee (MPC) meeting, set to start from Tuesday
It is widely expected to deliver a rate cut in order to support growth.It, however, added that growth may recover mildly to 5.5 per cent
from 4.8 per cent in the first half, with support from monetary policy, agriculture, a mild pick-up in government spending, and a weak base
effect."There is also an atypical brake at work the clean-up of the financial sector happening after almost 20 years
That can stretch the slowdown, particularly because policy space for counter-cyclical action is limited with tax revenue way behind target,"
Crisil noted."Recent data shows that government has decided to speed up spending to support the economy
It now becomes important to fast-track non-tax revenue generation through divestments and asset monetisation to keep the fiscal deficit
Monetary policy transmission has also been weak, and financial sector stress and risk aversion have adversely impacted credit flow.
