India to be fastest growing economy again in 2018: World Bank

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New Delhi: after awarding the first place in economic growth among major economies to China for one year in 2017, it is likely that India will recover the position in 2018 and growth is expected to accelerate to 7.3% in the year, according to the Global Economic Perspectives report released on Wednesday.

The World Bank report projects that China’s economy will continue to slow down to grow by 6.4% in 2018 from 6.8% in 2017. The multilateral institution, however, revised down India’s growth estimate for 2017 to 6.7% of the 7% projected in October of last year, blaming “Short-term interruptions of the recently introduced GST”.

Undoubtedly, the estimates are based on the fiscal year of each country, which means that for India 2017 is 2017-18 (April-March), for China 2017 it is the calendar year.

India’s statistics office projected Friday that India’s economy will slow to 6.5% in 2017-18 from 7.1% a year ago due to the persistent impact of demonetization and disruptions caused by the implementation of the property tax and services (GST).

Economic affairs secretary Subhash Chandra Garg tweeted: “The World Bank publishes its estimates of GDP growth, India is expected to grow to 6.7% in 2017. Higher 7.3% growth projected for 2018. The impressive advance payments of corporate taxes in the third quarter indicate that the recovery of growth in India will be much better. ”

Direct tax collections grew more than 18% in the first nine months (April-December) of fiscal year 2017-18 to two thirds of the annual target, which is expected to serve as a respite to the government as it struggles to contain the fiscal deficit .

The World Bank said that strong private consumption and services are expected to continue supporting economic activity. “Private investment is expected to revive as the corporate sector adjusts to the GST, infrastructure spending increases, partly to improve public services and connectivity to the Internet, and the weaknesses of the private sector balance are mitigated with the help from the efforts of the government and the Reserve Bank of India, “he said.

He said that in the medium term, the GST is expected to benefit economic activity and fiscal sustainability by reducing the cost of complying with multiple state tax systems, attracting informal activity to the formal sector and expanding the tax base. “The recent recapitalization package for public sector banks announced by the Government of India is expected to help resolve balance sheets in the banking sector, support credit to the private sector and boost investment.” World trade recovery is expected to rise exports, “he added.