THE Indian government’s recent policy measures to improve private investment will help to lift country’s economic growth in the next two financial years, a report from the Asian Development Bank said today (3).
In its Asian Development Outlook (ADO) 2019, the lender projected gross domestic product (GDP) growth in India to rise to 7.2 per cent in fiscal year (FY) 2019 and reach 7.3 per cent in FY2020.
ADB chief economist Yasuyuki Sawada said: “India will remain one of the fastest-growing major economies in the world this year given strong household spending and corporate fundamentals.
“India has a golden opportunity to cement recent economic gains by becoming more integrated in global value chains.
“The country’s young workforce, an improving business climate, and a renewed focus on export expansion all support this.”
Income support to farmers, hikes in procurement prices for food grains, and tax relief to tax payers earning less than £5,473 will boost household income.
Declining fuel and food prices are also expected to provide an impetus for consumption.
Downside risks to growth include a higher-than-expected moderation in global demand and a potential escalation of trade tensions.
Lower-than-targeted tax revenues or a delay in strengthening bank and corporate balance sheets could also undermine economic expansion.
Consumer price inflation is expected to rise to 4.3 per cent in FY2019 and 4.6 per cent in FY2020 as food costs increase slightly and domestic demand strengthens.