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World Bank's optimism hinges on...
Thu, 15 Jan Pre-Open

India's growth is going to accelerate at a fast pace for the upcoming period. In the fourth year of Narendra Modi's government India is set to clock a 7% rise in GDP in 2017 compared to China's growth projected at 6.9%. This is what the World Bank expects .

As per World Bank what is likely to drive this growth?

World Bank believes that the softening of the oil prices will boost the growth of the oil importing countries like India. Falling prices offer a great opportunity for implementing subsidy and energy tax reforms to the Government. Infact, the new government has already undertaken a series of measures and has also passed several ordinances to pump prime growth in the country. This raft of several measures taken by the government could turbo-charge India's economic growth.

We too believe, after coming to power, Modi Government has delivered on some long pending policies. This suggests that the Government intends to walk the talk when it comes to reforms and economic growth. India still stands to benefit immensely if reforms are effectively implemented and infrastructure growth is given a massive push. This will reflect positively on corporate earnings, fuel domestic demand and set the stage for the next decade of growth in the Indian economy.

Undoubtedly the current trends and World Bank's projections portray an enthusiastic picture but there are some warning signals too. It is imperative to note that, the World Bank has also lowered its global growth forecast for 2015 and next year due to disappointing economic prospects in the Euro zone, Japan and some major emerging economies. And we believe, one should not ignore the situation in global countries too. This is because India's future growth will also depend on the inflow of money in India and export performance. Hence adverse global macros aspects can impact the India's efforts to grow.

Having said that, the Government will need to keep the reform momentum going to realize the targets set. Otherwise, it won't take long for global money and agencies to lose confidence and interest.

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Jan 19, 2018 (Close)