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"Recent macro data indicate a reversal of soft third quarter of fiscal 2015-16 prints and support our view that a gradual cyclical recovery will push GDP growth to 7.7 per cent in fiscal year 2016-17," Citigroup said in a research note. As per the report, reforms look more powerful because of more "productive" Parliament.
"New bankruptcy code to deal with insolvency should be passed in the second half of the session; GST hopes are alive. Upper house reshuffle should increase NDA strength in 2016 but majority remains elusive," the report added. It also said that "well-behaved" inflation has made things easier.
"Our average CPI forecast of 4.9 per cent in FY17 builds in 50 bps impact from
Earlier this month, RBI cut the key interest rate by 0.25% and brought it do 6.5%; ensuring that banks lend to the productive sectors that require the boost.
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