India’s annual economic growth seen slowing during Narendra Modi’s run for re-election

Vastavam web: India’s annual economic growth probably moderated to 7.4 percent in the July-September quarter, according to a Reuters poll, weakening just as Prime Minister Narendra Modi’s Hindu nationalist led-government gets set for an election due by May. That is still faster than China, but a come down from the more than two-year high of 8.2 percent set in the June quarter and some economists foresee the slowdown continuing though to the election at least. Prasanna was cautiously optimistic about the outlook, but much would depend on the election outcome.

“Any signs of political uncertainty could affect market and business sentiment,” he said. Having swept to power in 2014 promising to galvanize the economy, Modi has been criticized as even in the good quarters the unevenness of India’s economy has meant that growth in jobs hasn’t kept pace.

The unemployment rate rose to a two-year high of 6.9 percent in October, and 29.5 million youth were looking for jobs, according to a report released earlier this month by Centre for Monitoring India Economy (CMIE), a Mumbai based think tank. At least one handicap has been removed as oil prices have come down sharply from their heights of earlier in the year. But data for industrial production, vehicle sales, and tourism arrivals has made disappointing reading.

The gross domestic product data INGDPQ=ECI will be released on Friday around 1200 GMT. The Reserve Bank of India has forecast economic growth of 7.4 percent for the financial year ending in March, recovering from 6.7 percent in the previous year, slowest in four years. On Wednesday, a government panel announced a revised growth estimates that made the Modi administration’s record look better than the previous Congress-led governments.