GST Reforms To Have Sustained Positive Impact On Economy: RBI Bulletin

The landmark GST reforms should progressively result in a sustained positive impact through significant gains in ease of doing business, lower retail prices and strengthening of consumption growth drivers, the RBI stated in its monthly bulletin published on Wednesday.

Coupled with income tax relief for households and employment augmenting measures, the stage is set for a sustained pick-up in consumption demand in the second half of this fiscal, and potentially for a virtuous cycle of higher investments and stronger growth impulses, overcoming persistent global uncertainties, the RBI said.

• A higher kharif sowing is expected to translate to a sustained growth momentum in the agriculture sector, while also keeping food prices under check.

• The transmission of the front-loaded monetary policy easing measures have been robust.

• The high-frequency indicators for economic activity showed steady growth in August with rural demand remaining robust, though urban demand continued to show some weakness.

• Consumption expenditure and fixed investment activity remained strong, negating the decline in net exports.

• The growth outlook for H2 is one of optimism. Healthy corporate balance sheets and the focus on structural reforms by the government are the bright spots of the economy.