EAC says Indian economic recovery likely after September

Suresh Tendulkar, the head of the Prime Minister’s economic advisory council (EAC), said on Monday that the Indian economy will start recovering after September onwards. The economy slowed down to a five-year low in the December quarter, but clocked a better than expected growth of 5.8% in the March quarter.

The EAC head also said that the economy should be able to grow close to 7% in the present fiscal. He, however, added that the story could be different case of a failure of the monsoon.

The advance of monsoon has become very slow after its earlier than expected arrival. However, the meteorological department has said that India will still be able to garner 93% rains of the monsoon’s long term average.

Economists are pointing out that even a partial failure of the monsoon can seriously damage the prospects of the Kharif crop, nearly 60% of which is rain fed. Also, if the monsoon fails, it will have significant negative implications for growth of broader economy in general and food inflation in particular.