Business

India Has Enormous Growth Potential, Says World Bank, Projects 2018 Growth At 7.3%

DIVYIA ASTHANA | 0
3194
| January 10 , 2018 , 08:52 IST

Despite setbacks due to the demonetisation and implementation of Goods and Services Tax (GST), the World Bank has projected India's growth rate at 7.3 percent in 2018 as compared to the 6.7 percent in 2017, as per the 2018 Global Economics Prospect released by the bank on Tuesday.

The World Bank further projected India's growth rate over the next two years as 7.5 percent, saying that with an "ambitious government undertaking comprehensive reforms", India has "enormous growth potential" compared to other emerging economies.

"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 big picture is telling us that it has enormous potential," Ayhan Kose, Director, Development Prospects Group, World Bank said.

Image result for Ayhan Kose, Director, Development Prospects Group, World Bank said

Kose added, that in comparison to China, which is slowing down, the World Bank expects India to gradually accelerate.

Although China in 2017 grew 0.1 percent more than India with a growth rate of 6.8 percent, the forecast for China's growth rate in 2018 is 6.4 percent, which is expected to further drop to 6.3 percent and 6.2 percent over the next two years respectively.  

However, according to the World Bank, India needs to take steps to boost investment prospects to materialise its potential.

"On the productivity side, India has enormous potential with respect to secondary education completion rate. All in all, improved labour market reforms, education and health reforms as well as relaxing investment bottleneck will help improve India's prospects," Kose said.

ALSO READ: Indian Economy Can Double In Next 6-6.5 years, Says Suresh Prabhu

He further noted that India has a favourable demographic profile which is rarely seen in other economies.

"In that context, 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.

"India is a very large economy. It has a huge potential. At the same time, it has its own challenges. This government is very much aware of these challenges and is showing just doing its best in terms of dealing with them," the World Bank official said.

"The big issue about India, when you look at India's growth potential and our numbers down the road 2019 and 2020, is that it is going to be the fastest growing large emerging market," Kose said.