Morgan Stanley sees India growth @6.1%
cylinders, opening up pension sector to foreign investment and raising FDI cap in insurance to 49 per cent.
India had been growing around 8-9 per cent before the global financial meltdown of 2008. The growth rate in 2011-12 slipped to a nine-year low of 6.5 per cent and in the quarter ended June 30, 2012, the economy grew by 5.5 per cent.
The government expects the economy to expand by 5.5 - 6 per cent this fiscal.
According to Morgan Stanley, policy reforms is the key anchor to correct the “bad growth mix”. If the government aggressively implements policy reforms and kick-starts large Greenfield projects and takes steps towards expenditure control, growth rate could see a significant uptrend.
In a bull case scenario, if the government aggressively implements policy reforms, and initiates steps for management of rural wages in line with productivity, we could see GDP growth accelerating to 7.1 per cent in 2013, it said.
However, “If the government fails to continue implementing reforms and/or reverses some of the reforms announced recently, we could see GDP growth slipping to 5.1 per cent in our bear case scenario,” it added.
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