The World Bank has kept in front its reports forecasting India’s growth for 2015-16, says it will continue to grow; it is also set on the course of modest acceleration in growth in years that will follow.
The lending agency in its reports said “The latest India Development Update expects India’s economic growth to be at 7.5% in 2015-16, followed by a further acceleration to 7.8% in 2016-17 and 7.9% in 2017-18.” It further added “acceleration in growth is conditional on the growth rate of investment picking up to 8.8% during FY16 to FY18.”
On the launch of report on 29th October, Frederico Gil Sander, World Bank India’s Senior Country Economist said, India has efficiently en-cashed benefit of the quick decline in global oil and commodity prices to reduce petrol and diesel subsidies and increase excise taxes.
“Resources from lower subsidies and higher taxes have been well utilized in lowering deficits and increasing capital expenditure,” added Frederico. He also noted that “Public sector banks, which account for three-fourths of domestic credit, are under stress, with a rising share of non-performing assets.”
The report which are residing at state level, are now conscientious for 57% of spending and account for 16% of GDP. Of this, nearly 74% of the funds are unchained compared with an average 57% during the 13th Finance Commission period, providing more flexibility to states.
The reports suggested that Government must emphasize on collecting direct taxes, so as to boost overall income.
“India’s direct tax collection is among the lowest in the world. Direct taxes account for a mere 5.7% of GDP in India compared with 11.4% in OECD countries,” the report said.
Government’s efforts for successfully bringing Current Account Deficit (CAD) down to 1.4% in 2015-16, it said CAD is likely to inch up to 1.7% in 2016-17 and 2% in 2017-18, received a special mention.
Highlighting on the need to boost export-oriented growth, the report said, “Although India may be able to achieve a fast GDP expansion without export growth for a short period, sustaining high GDP rates over a longer period will require a recovery of exports.”