Daily Management Review

World Bank Says India To Become The Fastest Growing Major Economy In The World In 2018


01/10/2018




World Bank Says India To Become The Fastest Growing Major Economy In The World In 2018
According to the World Bank’s Global Economic Prospects released on Wednesday, India is expected to be the fastest growing major economy again in 2018 with a growth rate of 7.3% in the year after the economy conceded the top spot to China, among the major eocnomies, for a year in 2017.
 
The growth rate of China is predicted to cool down in 2018 from the 6.8 per cent in 2017 to about 6.4 per cent in 2018, said the World Bank report. However, “short-term disruptions from the newly introduced GST” was cited to the reason for the multilateral institution cutting down the growth prospects for India for the current fiscal year to 6.7 per cent from the estimate of 7 per cent that had been projected by it in October last year. 
 
It needs to be mentioned here that the estimates issued are on the basis of the fiscal year followed by each country. For example, fiscal 2017 for China would by the calendar year while for India it would be 2017-18 (April-March).
 
Because of the impact of demonetisation and the debacle resulting from the chaotic implementation of the goods and services tax (GST), the growth prospect of the Indian economy was brought down by the country’s statistics office on Friday to to 6.5% in 2017-18 from 7.1% a year ago.
 
Economic affairs secretary Subhash Chandra Garg tweeted: “World Bank releases its GDP growth estimates. India projected to grow at 6.7% in 2017. Higher growth of 7.3% projected for 2018. Impressive advance corporate tax payments in 3rd quarter indicates India’s growth turnaround to be much better.”
 
There was a growth of 18 per cent in the collection of direct tax collections for the first nine months (April-December) of the fiscal year 2017-18 which was about two-thirds of the target of the full-year. This would be good news for the government which has struggled to stick to the fiscal deficit target.
 
The economic activity in India is expected to be supported by strong private consumption and services, said the World Bank. “Private investment is expected to revive as the corporate sector adjusts to the GST; infrastructure spending increases, partly to improve public services and internet connectivity; and private sector balance sheet weaknesses are mitigated with the help of the efforts of the government and the Reserve Bank of India,” it said.
 
Expansion of the tax base, drawing informal activity into the formal sector and reduction in the cost of adhering to multiple state tax systems would be the anticipated benefits of the GST in the medium term, the World Bank said.
 
“The recent recapitalization package for public sector banks announced by the Government of India is expected to help resolve banking sector balance sheets, support credit to the private sector, and lift investment. The global trade recovery is expected to lift exports,” it added.
 
(Source:www.livemint.com)






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