Amid bleak outlook in the consumption and investment growth story, CRISIL, global rating agency revised its growth forecast for India lower to 6.9% as against 7.1% earlier for the FY20 period. Also, on the sidelines the firm hinted that the current economic turmoil is similar to the one country witnessed in 2009 and recovered sharply from it.
The report further suggests that the economy will gain ground in the second half of the FY'20, with feeble performance continuing in the first half of the ongoing fiscal year. There can be a turnaround with corporate profit gearing ahead of revenue growth.
For the current quarters, slump in auto sales to almost 2 decades remains the main highlight signaling weakness in the economy. Nonetheless, profitability is expected to be fuelled by sectors such as telecom and aviation.
Additionally, lack of push to export incentive sectors as well as softness in the prices of commodity coupled with global trade war situation is hurting the metal industry.Agriculture income which too has remained stagnant can be promoted to an extent through a normal monsoon this season. Also, urban income too has not seen a spur with income levels remaining almost tepid.
Infrastructure, which is an integral part of the economy, may see further headwinds and with all such global and domestic factors, there remains limited scope to rebound the weakening economy. Nonetheless, the rate cut by the US Federal Reserve will keep global funds continuing to flow into the Indian economy.