India will be the world’s fastest growing large economy at 7.3 per cent in 2016, improving further to 7.5 per cent in the following year, a United Nations world economy report said today.
“India’s economy, which accounts for over 70 per cent of South Asia’s GDP, is projected to grow by 7.3 per cent in 2016 and 7.5 per cent in 2017, slightly up from an estimated 7.2 per cent in 2015.”
India will be the fastest-growing large economy in the world, said World Economic Situation and Prospects 2016, which was released by the UN here.
The report said South Asia is expected to be the world’s fastest-growing region in 2016 and 2017.
“As in other countries of the region, the macroeconomic environment in India has improved, helped by the sharp decline in the prices of oil, metals and food.
“Consumer and investor confidence has risen even as India’s government faces difficulties in implementing its wide-ranging reform agenda and some economic indicators, such as industrial production, remain volatile”, said the report.
UN report sees majority of the countries in South Asia to see accelerated growth over the next two years on the back of strong private consumption as the main driver of growth, offsetting relatively tight fiscal policies and sluggish exports.
Talking about India, Nagesh Kumar, Economist and Head, UN-ESCAP South and South-West Asia, said using fiscal policy, it can speed up investment in education and infrastructure which will not only boost the growth rate but will also make growth for future.
“Spending on infrastructure, health and education is very low compared to other nations such as China in the region. So there is room to expand. And for that you need fiscal space and you need to look at how to increase revenues.
“The decline in oil prices of course provide some room to offset the burden of fuel bill. So this is the time for India to recheck fiscal efforts and raise revenues and do more spending on some of the social sectors,” Kumar said.
Reiterating Finance Minister Arun Jaitley’s recent statement that India will boost spending on infrastructure and social segment, he said there is a consistency in the broad role of the fiscal policy by the government.