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Last updated: 12 Oct, 2016  

India.Globe.9.Thmb.jpg Growth prospects

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Bikky Khosla | 12 Oct, 2016
India's GDP forecast has been revised upward to 7.6 percent. The International Monetary Fund (IMF) in its World Economic Outlook (WEO) last week came out with these new numbers, citing the Indian economy's resilience and robust growth momentum. Three month ago, the international organization cut the growth forecast to 7.4 percent, pointing out to sluggish recovery in private investment, but now it feels that the economy is recovering fast, due to improvement in the terms of trade, effective policy actions, and stronger external buffers. These views sound encouraging.  

But when it comes to the world economy, IMF is not that optimistic. It has kept the global growth forecast unchanged at 3.1 percent in 2016 and 3.4 percent for 2017. Growth for the US economy is estimated at 1.6 percent this year and 2 percent in 2017. Overall, advanced economies, which include Europe and Japan, are expected to grow 1.6 percent this year and 1.8 percent next year. In other words, global demand will likely remain dull in these two years, and it can't be good news for our exporters. In addition, the report adds that  the expected slight improvement in world economic growth from 3.1 percent in 2016 to 3.4 percent in 2017 will likely be due to rise in commodity prices. This might not bode well for the Indian economy.

Currently, our trade deficit and current account deficit are under control. Trade deficit declined to $23.8 billion in Q1 as against $34.2 billion in the year ago period, which, in turn, helped to bring down CAD to $0.3 billion during the period. In addition, food driven retail inflation is no longer a major worry, with a normal monsoon raising hope that our rain-fed Kharif harvest will be the highest ever in history at 135 million tonnes in 2016-17. So, there is nothing wrong about being optimistic, but complacency can be dangerous, particularly in the background of the dull global outlook, and if we want to ensure growth we must not overlook the concerns which are on the horizon.

Our exports, after a long period of decline, have started showing some positive signs and to ensure this momentum -- particularly in a scenario of low global demand, high commodity prices and rising protectionism -- we must improve our export competitiveness and break into emerging markets. Meanwhile, the August IIP figures point to one of the lingering challenges the domestic economy is facing -- lack of private investments. During the April-August period, capital goods output shrank by 21.4 percent. Without healthy exports and revival in private investments, I don't believe sustained high growth will be possible for us.

I invite your opinions.
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Franco | Fri Oct 14 05:24:15 2016
Dear sir, you have missed out china the Global export force and we are the largest importers from china. Regards

India economic growth
Dr. G.V.Ramakrishna | Thu Oct 13 05:53:19 2016
We need to restrict usage of oil in automobiles, 10% of new vehicles must be electrical hybrid and by 2030 all should be electrical only. ABB technology to be adopted. Ethanol blended fuel mandatory. When oil prices are low right time to attack.

Road transport & economy
Jagdish Taneja | Thu Oct 13 05:50:58 2016
At ground level our industry is passing worst period. It is going to remain so unless tax reforms implementation is done. We got to compete China ? NGT Imposing taxes, phasing out commercial vehicles ; which may not be easy to fulfill gap and may lead total grinding halt on movement of goods : Economy-wise decisions have to be taken not political benefiting a few.  Revival of cottage industries of course with latest technology will generate employment.

lack of Investors initiative!
Rajiv Kumar Gupta | Thu Oct 13 05:33:41 2016
The Industrialists, specifically METAL RECYCLING SECTOR the backbone of Automobile Industry is lying LOW what so may be the reason. The Government Machinery should create line of INITIATIVES in their MAKE IN INDIA CONCEPT to generate ENERGETIC VIBRATIONS thus mobilizing this Sector to SPREAD THEIR WINGS addressing both ENVIRONMENTAL as well as TECHNOLOGICAL IMPROVEMENTS thus favoring progressive growth.

Growth prospects
A.V. Chandran | Thu Oct 13 04:10:54 2016
Continuous micro to macro mission economic review mechanism towards micro to macro vision continuous development is a must to book result oriented economy for the great Nation like India

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