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India To Grow At 6-6.5% in 2021, 5% In FY20: Economic Survey

Suggesting an uptick in GDP growth in the second half of 2019-20, the government on Friday said that based on first Advance Estimates, India’s GDP growth would be 5 per cent for the current fiscal. The Economic Survey 2019-20, tabled in the Parliament on Friday by Finance Minister Nirmala Sitharaman, also projected that India’s GDP was expected to grow in the range of 6 to 6.5 per cent in FY21.
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The Survey said that the uptick in second half of 2019-20 would be mainly due to ten positive factors like picking up of NIFTY for the first time this year, an upbeat secondary market, higher FDI flows, build-up of demand pressure, positive outlook for rural consumption, rebound of industrial activity, steady improvement in manufacturing, growth in merchandise exports, higher build-up of foreign exchange reserves and positive growth rate of GST revenue collection. 
It added that the current deceleration in GDP growth could be understood within the framework of a slowing cycle of growth with the financial sector acting as a drag on the real sector.
To achieve the projected growth of 6 to 6.5 per cent in the next fiscal, the Survey asked the government "to use its strong mandate to deliver expeditiously on reforms for the economy to strongly rebound in 2020-21".
The Survey pointed out that the year 2019 was a difficult year for the global economy with world output growth estimated to grow at its slowest pace of 2.9 per cent since the global financial crisis of 2009, declining from a subdued 3.6 per cent in 2018 and 3.8 per cent in 2017. 
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"Uncertainties, although declining, are still elevated due to protectionist tendencies of China and USA and rising USA-Iran geo-political tensions. Amidst a weak environment for global manufacturing, trade and demand, the Indian economy slowed down with GDP growth moderating to 4.8 per cent in first half of 2019-20, lower than 6.2 per cent in second half of 2018-19. A sharp decline in real fixed investment induced by a sluggish growth of real consumption has weighed down GDP growth from second half of 2018-19 to first half of 2019-20," it said 
However, it added that the real consumption growth recovered in Q2 of 2019-20, cushioned by a significant growth in government final consumption. 
"At the same time, India’s external sector gained further stability in first half of 2019-20, with a narrowing of Current Account Deficit (CAD) as percentage of GDP from 2.1 in 2018-19 to 1.5 in first half of 2019-20, impressive Foreign Direct Investment (FDI), rebounding of portfolio flows and accretion of foreign exchange reserves," the Survey document said.
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It added that given India’s record of growth with macroeconomic stability over the last five years, with annual average growth rate of 7.5 per cent, the economy was poised for a rebound towards the $5 trillion goal by 2024-25. 
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