The International Monetary Fund (IMF) stated Indian economy to grow 7.5 per cent in 2015-16, more than China’s, estimated at 6.8 per cent.
The growth is estimated on a rise in disposable income and a pick-up in investment due to recent policy reforms. For 2015-16, the Economic Survey projects India to grow 8.1-8.5 per cent, higher than the IMF forecast.
However, IMF also projected the same growth for India in 2016-17 and said growth wouldn’t exceed 7.8 per cent till 2020-21. This seems a far cry from the expectation of Arvind Panagariya, vice-chairman of the National Institution for Transforming India (NITI) Aayog, who has said the economy could clock annual growth of 8-10 per cent through the next 15 years.
The World Bank, meanwhile, said India’s economic growth could touch eight per cent in 2017-18 from 7.5 per cent in 2015-16, owing to an estimated investment growth of 12 per cent during FY16-FY18.
Another positive factor, IMF also projected retail inflation in India at 6.1 per cent in 2015-16 and 5.7 per cent in 2016-17. If this is actually the case, inflation would be in line with the Reserve Bank of India’s target of six per cent by January 2016 and India Inc. may look forward to further loosening of the interest rate, which may have further growth spin-offs.