Fitch Ratings that earlier projected India’s Gross Domestic Product (GDP) growth at 6.6 percent for the fiscal year that began on April 2019, has now slashed it 5.5 percent for the current fiscal.
The report said that a large credit demand raised by the shadow banks has pushed economic growth to a six-year low. However, recent government initiatives will level-up economy. It said that a cut in corporate tax rates will gradually boost growth.
The report also said that the GDP expansion will increase to 6.2 percent in the next financial year (2020-21) and to 6.7 percent in the year after.
“Weakness has been fairly broad-based, with both domestic spending and external demand losing momentum,” Fitch said. “The Indian economy is being held back by a large squeeze in credit availability emanating from non-bank financial companies (NBFCs).”
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