With an "ambitious government undertaking comprehensive reforms", India has "enormous growth potential" compared to other emerging economies, the World Bank said on Tuesday 9th January, as it projected country's growth rate to 7.3 percent in 2018 and 7.5 for the next two years.
According to PTI, India, despite initial setbacks from demonetisation and Goods and Services Tax (GST), is estimated to have grown at 6.7 percent in 2017, according to the 2018 Global Economics Prospect released by the World Bank in Washington on Tuesday. In an interview with PTI, Ayhan Kose, the Director of Development Prospects Group, World Bank, told, "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 the big picture is telling us that it has enormous potential."
In comparison with China, which is slowing, the World Bank is expecting India to gradually accelerate.
In 2017, China grew at 6.8 percent, 0.1 percent more than that of India, while in 2018, its growth rate is projected at 6.4 percent. And in the next two years, the country's growth rate will drop marginally to 6.3 and 6.2 percent, respectively. However, Kose also said that in order to materialise its potential, India needs to take steps to boost investment prospects.
Noting that India has a favourable demographic profile, he said it is rarely seen in other economies. "In that context, the improving female labour force participation rate is going to be important. Female labour force participation still remains low relative to other emerging market economies. Bringing force right now idle outside of the productive activities will make a huge difference," he said.
In a South Asia regional press release, the World Bank said India is estimated to grow 6.7 percent in the fiscal year 2017-18, slightly down from the 7.1 percent of the previous fiscal year. This is due in part to the effects of the introduction of the GST, but also to protracted balance sheet weaknesses, including corporate debt burdens and non-performing loans in the banking sector, weighing down private investment, it said.