With India touted as a “bright spot” in a gloomy global economy, Reserve Bank of India retained its FY17 GDP growth projection at 7.6 per cent, same as it sees both upside and downside risks. While cutting the policy lending rate by 25 bps to 6.5 per cent, RBI expects a normal monsoon will revive rural demand.

• “The uneven recovery in growth in 2015-16 is likely to strengthen gradually into 2016-17, assuming a normal monsoon, the likely boost to consumption demand from the implementation of the 7th Pay Commission recommendations and OROP, and continuing monetary policy accommodation,” RBI Governor Raghuram Rajan said in his policy review.

• After two consecutive years of deficient monsoon, Rajan said a normal monsoon would work as a “favorable supply shock”, strengthening rural demand and augmenting the supply of farm products that also influence inflation.

• “On the other hand, the fading impact of lower input costs on value addition in manufacturing, persisting corporate sector stress and risk aversion in the banking system, and the weaker global growth and trade outlook could impart a downside to growth outcomes going forward. The GVA growth projection for 2016-17 is accordingly retained at 7.6 per cent, with risks evenly balanced around it,” he said.

• India stats office CSO projected FY16 growth at 7.6 per cent while the government’s Economic Survey forecast growth between 7-7.75 per cent for FY17.