A UN study recently said that India’s economy is estimated to grow at 7.6 pct in 2017 as investment recovers drive and manufacturing base fortifies on the support of structural reforms in the country, crediting India and China for stable progress of the Asia-Pacific region.
According to the year-end update of the flagship report Economic and Social Survey for Asia and the Pacific 2016 of the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), “India’s economy is projected to sustain a 7.6 pct growth rate in both fiscal years 2016-17 and 2017-18” .
The ongoing structural reforms are also expected to benefit private investment in India.
In India while growth in the first quarter of the current fiscal year (April-June 2016) moderated due to a contraction in fixed investment, a rebound is expected.
“Initially, growth will be driven by a rebound in agriculture due to normal monsoon rain, which along with civil service pay revisions will support broad-based consumption growth. Later, growth will be underpinned by a recovery in private investment as the recent push to accelerate infrastructure spending and measures to create a better investment climate – due in part to the passage of the goods and services tax and bankruptcy code,” the report said.
The economic growth rate in China is projected to ease slightly to 6.4 % in 2017 as rebalancing towards consumption, services and higher value-added activities makes further progress, it added.
The report credited India and China as being the anchors of a high and steady growth of the Asia-Pacific region at a time when developed economies were struggling to sustain high growth rates.
“With developed economies losing some of their recovery momentum, the regions high and steady growth rate, led by China and India, has arguably been an anchor of stability for the struggling global economy,” it said.
The report added that fiscal institutions are being improved, with China moving away from off-budget spending and implicit guarantees and India taking a major step towards putting into effect a nationwide goods and services tax.
Further, deleveraging and reform efforts in countries such as China and India should contribute to enhance fiscal stability and higher productivity.
The report pointed out that stable economic conditions in the second half of 2016 provide an opportunity to internalize the economic, social, environmental and governance dimensions of sustainable development in a comprehensive manner.
It said tough domestic demand and policy support have resulted in the regions developing economies growing at a steady pace of just below five pct despite sluggish global economy and weak trade growth, according to the report.