Washington : India’s growth rate in 2018 is projected to hit 7.3 per cent, and accelerate to 7.5 per cent in the next two years, according to the World Bank, which said the country has “enormous growth potential” compared to other emerging economies with the implementation of comprehensive reforms. India is estimated to have grown at 6.7 per cent in 2017 despite initial setbacks from the demonetisation drive and the goods and services tax (GST), according to the 2018 Global Economics Prospect, released by the World Bank, this week.
“In all likelihood India is going to register higher growth rate than other major emerging market economies in the next decade. So, I wouldn’t focus on the short-term numbers. I would look at the big picture for India and big picture is telling us that it has enormous potential,” Ayhan Kose, Director, Development Prospects Group at the World Bank, told the PTI in an interview. He said in comparison with China, which is slowing, the World Bank is expecting India to gradually accelerate. “The growth numbers of the past three years were very healthy,” Kose, the author of the report, told the news agency.
China view
China grew at 6.8 per cent in 2017, 0.1 per cent more than that of India, while in 2018, its growth rate is projected at 6.4 per cent. And in the next two years, the country’s growth rate will drop marginally to 6.3 per cent and 6.2 per cent, respectively.
To materialise its potential, India, Kose said, needs to take steps to boost investment prospects. There are measures underway to do in terms of non- performing loans and productivity, he said. “On the productivity side, India has enormous potential with respect to secondary education completion rate. All in all, improved labour market reforms, education and health reforms as well as relaxing investment bottleneck will help improve India’s prospects,” Kose said. India has a favourable demographic profile which is rarely seen in other economies, he said. “In that context, improving female labour force participation rate is going to be important. Female labour force participation still remains low relative to other emerging market economies,” he said.
Reducing youth unemployment is critical, and pushing for private investment, where problems are already well-known like bank assets quality issues…If these are done, India can reach its potential easily and exceed, Kose asserted. “In fact, we expect India to do better than its potential in 2018 and move forward,” he said. The subcontinent’s growth potential, Kose added, would be around seven per cent for the next 10 years.