India's Quarterly GDP Growth To Return To Positive Territory In Q3 After Two Quarters Of Contraction, Says NCAERPrime Minister Narendra Modi with Finance Minister Nirmala Sitharaman.

After witnessing -23.9 per cent and -7.5 per cent contraction in the first two quarters of the ongoing fiscal year due to the Covid-19 pandemic and the resultant restrictions, India's gross domestic product (GDP) is now set to witness growth in the ongoing third quarter, according to the National Council for Applied Economic Research (NCAER), reports Economic Times.

NCAER has estimated that the India's GDP growth in the third quarter could end up marginally positive at 0.1 per cent. With this, NCAER has also positively revised its outlook for the annual GDP growth figure. While it had earlier estimated a -12.6 per cent contraction, now NCAER expects the contraction to be lower at -7.3 per cent.

Meanwhile, the think tank has projected that the inflation will likely stay elevated at 6.7% for the fiscal, over the Reserve Bank of India’s target band.

On the fiscal deficit front, NCAER has estimated the combined deficit of the Centre and the states to be at 14.2 per cent, accounting for the added borrowing by the states and the contraction in GDP.

For further growth momentum, NCAER has pressed for financial sector reforms on priority, followed by addressing issues in the power sector and the foreign trade front.

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