The country’s headline retail inflation is likely to see a downward trend in the next few months with government and monetary measures in place, the ministry said.
"The monsoon deficit of August has been partially plugged in September and that is good news," the ministry said.
However, the effect of a deficit monsoon last month on Kharif and Rabi crops as well as the recent run-up in crude oil prices are key concerns that need to be assessed, it noted.
"Recent run-up in oil prices is an emerging concern but, no alarms yet," the report said. A decision by Saudi Arabia and Russia to extend production cuts till the end of 2023 has pushed up crude prices.
Acknowledging that a potential stock market correction as well as geopolitical developments could hurt investment sentiment in the second half of the fiscal, the ministry said their impact on underlying economic activity should be relatively contained.
"Offsetting these risks are the bright spots of corporate profitability, private sector capital formation, bank credit growth and activity in the construction sector. In sum, we remain comfortable with our 6.5 per cent real GDP [gross domestic product] growth estimate for FY24 with symmetric risk," the report added.
While, India's Gross Domestic Product (GDP) growth rate hit a four-quarter high in April-June, rising to 7.8 per cent, headline retail inflation rate eased to 6.83 per cent last month after touching a 15-month high in July.
The government has targets a fiscal deficit of 5.9 per cent of the GDP for this fiscal.
ALCHEMPro News Desk (DS)
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