A day after Finance Minister Arun Jaitley projected Indian economy to take over China by recording a growth rate of 7.6 per cent in 2015-16, a report by United Nations on Thursday gave similar outlook for India’s growth projections.
UN’s report titled World Economic Situation and Prospect report, says that despite delays in policy reforms with in the country, India’s economy is projected to grow by 7.3 per cent this year.
“India’s economy is slowly gaining momentum, with an expected GDP growth of 7.3 and 7.5 per cent in 2016 and 2017, respectively and China, which grew at about 6.9 per cent in 2015, will continue to witness slowdown in growth, with its GDP projected to grow 6.4 per cent in 2016 and 6.5 per cent in 2017,” the report said.
Just a day before UN’s report on India’s growth projections, on Wednesday, Finance Minister Arun Jaitley said that while the global economies were faltering between – 2 to 2 per cent and projections were being lowered, India is recording a growth rate of 7.5 to 7.6 per cent despite obstructionist global environment and “we can do still better.”
“India has emerged as the fastest growing major economy in the world overtaking China by recording a growth rate of 7.6 per cent in 2015-16,” he said.
“India is a fast growing economy. The whole world is looking at us….If growth returns to the world, then we can grow better and faster, “Jaitley said during the debate on the finance bill.
Jaitley added that some sectors like steel, sugar, power and infrastructure have started doing well after the steps taken by the government and hoped that it would give a further boost to the economy.
The UN report pointed those delays in domestic policy reforms and fragilities in the banking system are slowing the growth targets.
It also said that rising FDI, government’s efforts towards infrastructure investments could give a momentum to the growth if hindrances are addressed.
“India is expected to achieve a 7.5 per cent GDP growth in 2017 and the economic prospects of the South Asian region will be “contingent” on the growth trajectory
The growth estimates for India in the mid-year update are in line with projections made in January this year, when the 2016 World Economic Situation and Prospect report had said that 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.
India’s economy, which accounts for over 70 per cent of South Asia’s GDP, had grown by about 7.2 per cent in 2015.
The report added that despite the protracted instabilities and general weakness of the global economy, South Asia’s economic outlook remains favourable, with most countries benefiting from low oil prices.