MUMBAI: An above normal monsoon predicted by the Indian Meteorological department (IMD) is likely to boost growth by another additional 50 basis points (one basis point is 0.01%) and FY’17 might end with a growth of 7 to 8% according to a report by State Bank of India . This would give the central bank to lower key policy rates by another 50 basis points, it said.“We believe that the agricultural GDP is most likely to witness a robust performance in the current fiscal and may even touch 7-8% mark because of the IMD projections amid the Government’s plan to lift agriculture sector.” Said S K Ghosh, chief economic advisor, SBI in a report. “This may pull up GDP by as much as 50 basis points.”As agriculture in India depends heavily on monsoons and given its contribution to gross value added or GVA growth is around 15%, the above normal monsoons is expected to have a positive impact on agriculture, thereby boosting economic growth.For FY’17, SBI expects consumer price inflation to be benign. Over a period of time as pulse prices decelerate, the pace of price increase will come down. This will mean we will be working on possibly a negative contribution of pulse prices in headline CPI, as a significant base effect will be involved towards the second half of current fiscal. “ This will mean RBI will have more firepower to cut rates possibly by upto 50 basis points. Also, with central India the home to pulses forecast to receive adequate rainfall in FY17, this will only strengthen our case.” The SBI report saidThe only concern though is that the sector is undergoing a structural compositional shift - currently food grains constitute about 20% of the total value of output from the agriculture & allied sector which is less than the contribution from the livestock sector (25%) and almost equal to that of the horticulture sector (20%).Overall, the above normal monsoon projections is likely to provide a boost to economy by raising rural productivity, farm income and rural demand amidst soft inflation.