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Niti sniffs rebound

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Niti Aayog, the government think tank, feels the current economic downturn has bottomed out and growth will rebound in the next two quarters.

"This downward cycle of economic growth began in the last two years of the UPA II government and that in my view it has bottomed out," Niti Aayog vice-chairman Rajiv Kumar said today.

"We will be achieving higher growth in the next two quarters, and I think 2018-19 will be much better than the current year (in terms of economic growth," he said at the AIMA diamond jubilee convention.

Stung by a slowing economy and hiccups in the implementation of the much touted goods and services tax, Prime Minister Narendra Modi earlier this week constituted a five-member Economic Advisory Council.

The council is supposed to analyse economic and other issues and advise the government on steps to tackle the economy's ailments.

A double blow in the form of last November's sudden demonetisation drive and a production slowdown ahead of the GST rollout in July, saw India's economy growing by just 5.7 per cent in the first quarter of 2017-18, its slowest in five years.

Kumar admitted that there had been problems on account of the demonetisation and the implementation of the goods and services tax (GST). However, he feels people have now got used to the new tax regime.

According to the Niti Aayog vice-chairman, historically countries which have adopted the GST have all seen some amount of decline in GDP growth as the system adjusts to the new tax rules.