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Economy to grow at 6% in FY-2014: ADB

Economy to grow at 6% in FY-2014: ADB
Highlights

New Delhi (PTI): Multilateral funding agency ADB said India's growth rate will improve to 6 per cent in the current fiscal on the back of stronger...

mon2New Delhi (PTI): Multilateral funding agency ADB said India's growth rate will improve to 6 per cent in the current fiscal on the back of stronger external demand and progress on reforms.

Reforms are needed in India to facilitate the turnaround from growth deceleration due to structural bottlenecks, deteriorating investment and a worsening current account deficit, 'Asian Development Outlook 2013' report said. The Manila-based funding agency said, however, the forecasts are subject to risks like another bad monsoon, slow headway on fiscal consolidation and reforms, and continued sluggishness in the global economy.

During 2012-13, India is expected to grow at 5 per cent, the slowest in the decade exacerbated by a slump in services, weak consumption, contracting exports and also reduced agricultural growth due to the late onset of the monsoon.

However, the growth will pick up to 6.5 per cent in 2014-15 on the back of expected improvement in global outlook and increase in exports, the report of Asian Development Bank (ADB) said.

"Supply and policy obstacles have seen growth decelerate and investment and industrial output slump, with the statistics compounded by weak global demand," said ADB Deputy Country Director Narhari Rao.

"Policymakers need to remove structural hurdles to faster growth, and while there have been some encouraging recent reforms, more is needed," he said. The report said the next two years should see some improvement, with a normal monsoon likely to lift agriculture, and exports, industry and services expected to expand on stronger domestic and external demand.

On the rate of price rise, the ADB report said, core inflation pressures are likely to recede, aided by more regular weather conditions and easing global commodity prices, although wholesale prices will remain elevated. India's inflation is seen at 7.2 per cent in 2013-14, easing back to 6.8 per cent the following year as government steps to raise diesel prices are completed.

Recent reforms like the creation of the Cabinet Committee on Investment to expedite government clearances for large projects, and cabinet approval for a land acquisition bill, are steps in the right direction, it said.

However, the report said, much more is needed if India is to go back to 8 per cent plus growth trajectory.

Good infra can put India back to 8% growth: Montek

New Delhi (PTI): India can get back to 8 per cent GDP growth with improved infrastructure, Planning Commission Deputy Chairman Montek Singh Ahluwalia has said. "If government concentrates 90 per cent of its energy on delivering the infrastructure, on environment, I think we will be back to 8 per cent growth much faster than what the people think today," Ahluwalia said.

He was speaking at the NDTV Profit Business Leadership Awards function here late Tuesday evening. Ahluwalia said the Indian economy was growing at the 5 per cent level from 8 per cent earlier.

"After all 5 per cent growth may look very good if you are in Europe, it will look very good if you are in Brazil... very good if you are in South Africa, very good if you are in Japan, but doesn't look good in India."

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