India's growth to touch 7.3% next fiscal, 7.5% in FY20

18 March, 2018, 01:22 | Author: Regina Lloyd
  • The World Bank’s biannual publication

World Bank foresees a growth higher than 7.5 percent.

Asia's third-largest economy, which grew at a rapid pace of 8.8 percent a year from 2004 to 2008, is expected to grow 6.7 percent this financial year, said Junaid Ahmad, country director of the World Bank while releasing a report.

However, sustaining growth rates exceeding eight per cent would require continued reforms, and "a widening of reform scope aimed at resolving issues related to credit and investment, and enhancing the competitiveness of India's exporting sector", the World Bank said in the "India Development Update".

However, unlike Economic Survey, which cited rising oil prices as a risk to economic growth, inflation and current account deficit, World Bank highlighted that 'oil price seem less of a risk for now, unless the outlook changes dramatically'.

"Many are attributing this short term down turn as a negative fallout from the reforms - demonetisation and goods and service tax (GST)", it said.

"India's long-term growth has become more steady, stable, diversified and resilient". "Durable revival in private investments and exports would be crucial for India achieving a sustained high growth of 8% and above".

Only during the period between 2003-04 and 2007-08 did India manage to sustain a growth rate of eight per cent for more than a year because of healthy growth in all domestic sectors accompanied by good growth in the global economy.




"Steadily and slowly, India has been growing".

"In addition, reforms to land, labour and financial markets are needed to assure the continued competitive supply and use of key production inputs, such as labour, land, finance, and skills", it added.

Titled "Role of trade finance for inclusive growth", the joint study by Assocham and professional services firm Deloitte said here on Thursday: "Blockchain's application for identity management and "know your customer" (KYC) looks quite promising".

The implementation of the new Insolvency and Bankruptcy Code is an important step towards improving the credit behavior; and the recent efforts towards recapitalization have the potential to ease stress on the banking sector and reinvigorate bank credit.

Referring to the slowdown in bank credit following a surge in bad loans in banks, estimated at almost $150 billion, the World Bank suggested consolidation of state banks and more space for private banks.

The report has also noted that while oil prices pose less of a risk for the economy, the expected normalisation of the monetary policy by the United States and other advanced economies are likely to tighten financing conditions. While oil prices pose less of a risk for the Indian economy, the expected normalization of monetary policy by the USA and other advanced economies are likely to tighten financing conditions. India's ranking has already improved form 130 in 2017 to 100 in 2018 on the index. Among the many preconditions for India to reverse this pattern are an infrastructural boost to bring it on par with the world's current manufacturing hubs.

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