Economy may grow by 8.1% this fiscal: Yes Bank

The economic growth is expected to accelerate to about 8.1% in the current financial year on the back of better monsoon prospects and growth in consumption demand, a report said on Monday.

The expected growth rate for the current fiscal is a shade higher than the bank's earlier projection of 7.8% GDP growth in 2016-17, the report by Yes Bank said.

"India's GDP is set to cross 8.1% growth rate in 2016-17 on the back of visible pickup in consumption demand like cement, oil, electricity along with stronger than anticipated fourth quarter 2015-16 corporate earnings.

"A quicker economic turnaround is thus getting supported by growth drivers getting broad based," the report said.

A surplus monsoon out-turn, assuming a favourable spatial and intertemporal distribution, is likely to support agriculture output and rural demand to a greater extent, it said.

Impetus to consumption demand on anticipated revision in wages for government employees and visible return in investment appetite by end of the year are other factors that will thrust growth, it added.

India's economy grew at 7.9% in the fourth quarter of last fiscal 2015-16 taking the growth rate for the entire fiscal to a five-year high of 7.6%.

The growth rate was mainly on account of good performance of manufacturing sector although farm sector grew at a much slower pace.

The Finance Ministry has expressed hope that the economy could grow at a rate of up to 8% in the current financial year on better monsoon forecast.