India, despite initial setbacks from demonetisation and Goods and Services Tax (GST), is estimated to have grown at 6.7 percent in 2017, according to the 2018 Global Economics Prospect released by the World Bank
World Bank in its latest report is bullish on India’s growth prospects ahead. India, despite initial setbacks from demonetisation and Goods and Services Tax (GST), is estimated to have grown at 6.7 percent in 2017, according to the 2018 Global Economics Prospect released by the World Bank here on Tuesday. India’s GDP growth will pick up to 7.3% in 2018-19 and to 7.5% for the next two years, said World Bank. “In all likelihood, India is going to register higher growth rate than other major emerging market economies in the next decade. So, I wouldn’t focus on the short-term numbers. I would look at the big picture for India and the big picture is telling us that it has enormous potential,” Ayhan Kose, Director, Development Prospects Group, World Bank, told PTI in an interview.He said in comparison with China, which is slowing, the World Bank is expecting India to gradually accelerate.
“The growth numbers of the past three years were very healthy,” Kose, author of the report, said. And in the next two years, the country’s growth rate will drop marginally to 6.3 and 6.2 percent, respectively.To materialise its potential, India, Kose said, needs to take steps to boost investment prospects.There are measures underway to do in terms of non- performing loans and productivity, he said.”On the productivity side, India has enormous potential with respect to secondary education completion rate. All in all, improved labour market reforms, education and health reforms as well as relaxing investment bottleneck will help improve India’s prospects,” Kose said.
Ease of doing business
India leapfrogged 30 places in the recently-published Ease of Doing Business index brought out by the World Bank. This is a singular feat any country can aspire for. One key factor commentators have missed while remarking on this is India emerging as an investment hotspot, leading to a spike in mergers and acquisitions (M&As). An important point to note here is that foreign capital’s appetite to be part of the India Growth Story has been sector-agnostic. The spate of M&As that the country has witnessed despite global headwinds and domestic disruptions—though these were transient—cut across sectors and themes. There are a host of positives that are playing out in India’s favour, including macro-economic outlook and a fast-changing regulatory eco-system—and both are central to the current M&A outlook. The Indian economy has stayed resilient over the past several quarters, mainly because of a stable fisc, easing credit conditions with manageable inflation and continued progress in reforms.
If these are done, India can reach its potential easily and exceed, Kose asserted.”In fact, we expect India to do better than its potential in 2018 and move forward,” he said.India’s growth potential, he said, would be around 7 percent for the next 10 years.The Indian government is “very serious” with GST being a major turning point and banking recapitalisation programme is really important, Kose said.”The Indian government has already recognise some of these problems and undertaking measures and willing to see the outcomes of these measures,” he said.” India is a very large economy. It has a huge potential. At the same time, it has its own challenges. This government is very much aware of these challenges and is showing just doing its best in terms of dealing with them,” the World Bank official said.
With PTI inputs