India’s GDP to be 7.6 percent in 2016: World Bank

India faces the challenge of further accelerating the responsiveness of poverty reduction to growth

GN Bureau | October 4, 2016


#South Asia Economic Focus   #Growth   #GDP   #Inequality   #Poverty   #World Bank   #India  
India’s GDP to be 7.6 percent in 2016
India’s GDP to be 7.6 percent in 2016

In India, GDP growth will remain strong at 7.6 percent in 2016 and 7.7 percent in 2017, supported by expectations of a rebound in agriculture, civil service pay reforms supporting consumption, increasingly positive contributions from exports and a recovery of private investment in the medium term, the World Bank said in its latest report on South Asia Economic Focus.

“However, India faces the challenge of further accelerating the responsiveness of poverty reduction to growth, promoting inclusion, and extending gains to a broader range of human development outcomes related to health, nutrition, education and gender,” it added.

South Asia has defied a sluggish world economy and solidified its lead as the fastest growing region in the world in 2016. Led by solid performance in India, economic growth is expected to gradually accelerate from 7.1 percent in 2016 to 7.3 percent in 2017.
According to the twice-a-year, South Asia Economic Focus, the region remains a global growth hotspot and has proven resilient to external headwinds such as China’s slowdown, uncertainty around stimulus policy in advanced economies, and slowing remittances. The main challenges remain domestic, and include policy uncertainty as well as fiscal and financial vulnerabilities.

"A reality check reveals that private investment – a key future growth driver across South Asia – is yet to be ignited to sustain and further increase economic growth,” said Annette Dixon, World Bank South Asia Region’s vice president. “Countries will need to activate the full potential of private investment and exports to accelerate economic activity further, reduce poverty and boost prosperity.”

Given its weight in the region, India sets the pace for South Asia as a whole. Its economic activity is expected to accelerate to 7.7 percent in 2017, after maintaining a solid 7.6 percent in 2016. This performance is based on solid growth contributions from consumption – boosted by normal monsoon and civil service pay revisions. Over the medium term, accelerated infrastructure spending and a better investment climate may help increase private investment and exports.

ALSO READ: India has world’s largest number of poor: World Bank

A reality check on the state of private investment in South Asia shows that the region has fallen short of expectations. Mobilising domestic savings remains key at the aggregate level. However, remittances and foreign direct investment prove very effective on a per-dollar basis, and the region should make the most of them. India can further rely on public infrastructure to crowd-in private investment, while finance may constrain investment in Pakistan.

The business cycle matters all across the region, providing a potential accelerator from GDP growth to investment growth. Ultimately, the investment climate sets the broader stage. But, most South Asian economies suffer from a challenging business environment and some are subject to broader uncertainty and insecurity, which is detrimental to investor confidence.    
 
“Political economy risks are widespread across South Asia, and uncertainty will need to be managed, particularly with a view to creating an attractive environment for domestic and foreign investment alike,” said World Bank South Asia Region’s chief economist Martin Rama. “Delivering the necessary energy, infrastructure, and regulatory improvements remains critically important to increasing private investment, thus boosting job creation and reducing poverty.”

Read the complete report here 

Comments

 

Other News

Covid norms relaxed; Mumbai restaurants, shops to remain open longer

After extending timings of shops and restaurants as well as the reopening of cinema halls and theatres under specified SOPs from October 22, in view of the festive cheer, the Maharashtra government has allowed restaurants and eateries to remain open till 12AM and shops and establishments to function till 1

Global Hunger Index data collection flawed: Arvind Panagariya

Rubbishing the recently released Global Hunger Index 2021, wherein India has slipped to 101 position to be placed below Pakistan, Nepal and Bangladesh, Arvind Panagariya, professor of economics at Columbia University and former vice chairman, NITI Aayog, has said that data collection and methodologies used

‘Blue Zones’ concept of healthy living and its relevance in India

A long life span free from diseases and disability, the so-called healthy aging, has been a matter of prime interest to humanity. It is widely held that the life expectancy is a function of interplay between various genetic and environmental factors. There is scientific evidence to support the fact that on

Motilal Nehru too had petitioned for release of his son: Vikram Sampath

Defence minister Rajnath Singh’s statement, that Mahatma Gandhi had asked V.D. Savarkar to file a mercy petition before the British, has ignited a debate. Vikram Sampath, a historian and author of a recent biography of Savarkar, says two weeks after Jawaharlal Nehru was lodged in Nabha jail, his

Gati Shakti: The National Master Plan

The launch of the Gati Shakti master plan will be a booster dose for India growth story. The plan, as the name indicates, will ensure Gati, i.e., speed and Shakti, i.e., empowerment to the ₹1 trillion national infrastructure pipeline. The plan will break inter-ministerial silos. For examp

Centre misusing probe agencies for political gains: Pawar

Hitting back at the central government in a strongly worded attack, Nationalist Congress Party (NCP) chief Sharad Pawar has said Bhartiya Janata Party is misusing central investigative agencies for political benefits. “Central agencies including ED, CBI and NCB are being used for polit

Visionary Talk with Dr Arvind Panagariya, Professor, Columbia University & Former VC, NITI Aayog



Archives

Current Issue

Opinion

Facebook    Twitter    Google Plus    Linkedin    Subscribe Newsletter

Twitter