The Indian economy is expected to see a gradual cyclical recovery with GVA growth averaging 6.7 per cent this fiscal, slightly higher than 6.6 per cent in 2016-17, says a Nomura report.


According to the Japanese financial services major, there could be some downside to the RBI's near-term projections.


"In our baseline, we expect some of the growth drag caused by demonetisation and GST to reverse and growth to recover from July-September quarter of 2017," Nomura said in a research note.


It however noted that though its lead indicators are signalling a pick-up in non-agriculture GDP growth, reduced sowing of crops and shortages of working capital since GST implementation suggest a more gradual uptick.


Moreover, investment also continues to hobble due to low capacity utilisation and bank balance sheet stress.  -- PTI