India likely to grow at 8% in 2016-17: FinMin

New Delhi, June 1 

With a boost from a likely good monsoon this year along with effective policy-making, the Indian economy is likely to grow at eight per cent in 2016-17, the Finance Ministry said on Wednesday.

"This year, the monsoon projections are good... we hope the monsoon will be good. The rural sector will be doing good because of the monsoon. And with the thrust given by the budget, the economy growth should reach 8 per cent in 2016-17," Economic Affairs Secretary Shaktikanta Das said during a press briefing here. 

The Indian economy grew by 7.6 per cent in 2015-16, and 7.9 per cent in the last quarter of the previous fiscal, the government data showed.

Attributing the 7.6 per cent growth in 2015-16 to the government's policy initiatives, Das said, "Government reforms, the direction given by the budget this year, growth in rural sector, all this put together, it is reflecting in overall GDP (gross domestic product) and fiscal deficit numbers."

The government had kept the fiscal deficit target at 3.9 per cent in 2015-16, which has been met, showed the data released by the Ministry of Statistics.

Das said it was the Indian manufacturing industry's growth that pushed the economy in 2015-16 during times of global headwinds. 

"The FDI reforms, reddressal of woes in the power sector, steel sector problems have been addressed... the outcome of all these initiatives is the 9.3 per cent growth recorded by manufacturing sector in 2015-16," the senior officer said.

At a time when the world scenario is grim and many continents and advanced economies are not doing well, India continues to be a bright spot in the world economy, he added. 

Das said the country's fiscal parameters are very strong and in line with the budget due to the government's prudent fiscal management.

Talking about various parameters, he said: "Capital expenditure was higher in 2015-16, which means asset creation, which is an important component of developing economy. To achieve the fiscal deficit target, there has been no cut in plan expenditure. Compared to 2014-15, the devolution of taxes to the states was higher in 2015-16."

Finance Minister Arun Jaitley earlier in the day said that the 7.6 per cent growth is a tribute to the public spending and confidence of foreign investors in India, who invested the highest ever even in the slowdown years.