Lok Sabha Question No. 3542 (UNSTARRED), answered on 2018-03-16
Subject: RBI Survey
Ministry: FINANCE
Asked by: RAM CHARITRA

## GOVERNMENT OF INDIA MINISTRY OF FINANCE

## DEPARTMENT OF ECONOMIC AFFAIRS

## LOK SABHA UNSTARRED QUESTION NO. 3542

TO BE ANSWERED ON 16 TH  MARCH 2018

## RBI SURVEY

3542. SHRI RAM CHRITRA NISHAD:

Will the Minister of FINANCE be pleased to state:

- (a) whether as per the series of surveys undertaken by the Reserve Bank of India (RBI) have indicated that Consumer confidence is declining, business sentiment in manufacturing dipping, inflation on the rise and growth sliding and if so, the details thereof;
- (b) whether the findings are in sync with the RBI's position in its monetary policy review on 04 October, 2017 Which slashed growth forecast from 7.3 per cent to 6.7 per cent for fiscal year 2017-18; and (c) if so, the details thereof?

## ANSWER

THE MINISTER OF STATE FOR FINANCE (PON. RADHAKRISHNAN)

- (a)  As  per  the  results  of  the  latest  round  of  Consumer  Confidence  released  by  the  RBI,  consumer confidence improved in December 2017 as the current situation index (CSI) recorded a significant rise after more than a year. CSI witnessed a sharp increase from 91.1 in November 2017 to 96.9 in December 2017.

The  RBI  released  the  results  of  the  80th  round  of  the  Industrial  Outlook  Survey  (IOS)  conducted  in October-December 2017 which captures qualitative assessments of the business situation by companies in  the  Indian  manufacturing  sector  for  Q3:2017-18  and  their  expectations  for  Q4:2017-18.  As  per  the results,  business  sentiment  in  the  Indian  manufacturing  sector  improved,  as  reflected  in  the  Business Expectations Index (BEI) rising from 103.7 in Q2:2017-18 to 109.8 in Q3:2017-18.

As per the latest data released by the CSO, CPI inflation declined from 5.07% in January 2018 to 4.44% in February  2018.  CPI  food  inflation  also  declined  from  4.70%  to  3.26%  for  the  same  period.  Inflation forecast for 2018-19 as per RBI's February 2018 bi-monthly monetary policy statement is expected to be 5.1-5.6 per cent in H1and 4.5-4.6 per cent in H2.

As per the Second Advance Estimate of National Income 2017-18 released by the CSO, growth of GVA at 2011-12 prices accelerated from 6.2% in Q2 to 6.7% in Q3. Similarly, real GDP growth accelerated from 6.5% in Q2 to 7.2% in Q3.

(b) & (c) RBI, in its latest Monetary Policy Statement of February 2018, took note of the global economic activity and global trade that has gathered pace since October 2017. On domestic front, it observed that the  manufacturing  purchasing  managers'  index  (PMI)  expanded  for  the  sixth  consecutive  month  in January 2018 led by new orders. Assessment of overall business sentiment in the Indian manufacturing sector improved in Q3 as reflected in its Industrial Outlook Survey. The RBI further observed that the GST implementation  is  stabilising  and  there  are  early  signs  of  revival  in  investment  activity  as  reflected  in improving credit offtake, large resource mobilisation from the primary capital market, and improving capital goods production and imports. Export growth is also expected to improve further on account of improving global demand. Taking into consideration the above factors, GVA growth is projected to accelerate from 6.6% in in 2017-18 to 7.2 % in 2018-19.

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