Amid ongoing pessimism over India's gross domestic products (GDP) growth slipping to a six-year low in June quarter, NITI Aayog Vice-Chairman Rajiv Kumar on Saturday said the economy will grow between 7 and 7.5 per cent in the second half of this financial year.
"The GDP growth bottomed out in the first quarter. The second quarter is going to be better than in the first quarter. It will rise in the second half in the range of 7-7.5 per cent," said Rajiv Kumar, Vice Chairman, NITI Aayog.
While speaking at the India Today Conclave Mumbai 2019, Rajiv Kumar said that the government will find additional revenues from disinvestments to provide a boost to the domestic economy as well as to revive investments that will increase India's competitiveness on the global stage. He said that the Modi government has planned to divest stakes in 24 companies to raise Rs 1.3 lakh crore which will help in bridging the budget deficit that arose out of corporate tax cut.
"Buoyancy in growth will be achieved through tax and disinvestment revenues. Tax collection continues to go up, while the government can raise about Rs 52,000 crore from disinvestment of 24 public sector companies that it lined up earlier," said Kumar.
For the first quarter ended April 2019, the growth in economy had slipped to a low of 5 per cent, weighed down by a slump in manufacturing output, weak consumer demand and deceleration in private investment.
Kumar said that the Indian economy will outpace China's growth as the second quarter performance has started improving and it will be better than the first quarter. The credit growth in the country is improving, he added.
India had lost its title of the world's fastest-growing economy to China in the March quarter when its economic growth slowed to 5.8 per cent compared to Beijing's growth of 6.4 per cent. During the April-June period, China, which is a much larger economy than India, had recorded a GDP growth of 6.2 per cent.
Kumar also lauded the government's decision to cut the corporate tax rate and expressed confidence that this will improve the positive sentiments of the companies.
The Finance Minister Nirmala Sitharaman on Friday announced a corporate tax cut for domestic firms and new domestic manufacturing companies. The tax rate has been cut to 22 per cent from the existing 30 per cent. The effective tax rate for these companies would be 25.17 per cent, inclusive of all surcharge and cess. For new manufacturing companies, the existing tax rate of 25 per cent has been brought down to 15 per cent.
Edited by Chitranjan Kumar