America
Now on India will grow faster, outpace China: UN
By
By Arul LouisUnited Nations, May 20
India is expected to
log a growth of 7.6 percent this year and 7.7 percent, nearly 1.5
percentage points higher than the outlook just four months ago, in a
clear sign that it will outpace China quite decisively, as per a UN
report released here Tuesday.
In the Mid-Year Update to the World
Economic Situation and Prospects 2015, the reason for India's outlook
is credited to changes in the way national income is computed, with no
specific mention of policy reforms during one-year of Prime Minister
Narendra Modi government being the cause.
The original report of
the UN Development Policy and Analysis Division (UNDESA), released in
January, had estimated India's gross domestic product (GDP) growth rate
for this year at 5.9 percent and 6.3 next year.
"This revision
mostly reflects a higher growth trajectory in India, where the recent
changes in methodology and data sources have resulted in a considerably
higher official growth figures for the past two years," said the latest
report.
"India is now projected to grow by 7.6 percent in 2015
and 7.7 percent in 2016, surpassing the growth of China," the report
added, in what should come as another major pat for the Bharatiya Janata
Party (BJP)-led government that completes one year in office this week.
The
latest UN update matches the projections of other international
institutions like the World Bank and the International Monetary Fund
that have also put India's growth rate as the fastest, and all of whom
have also revised the estimates for India upward.
Last week, in
fact, the UN Economic and Social Commission for Asia and the Pacific
(ESCAP) also released a report that said the Indian economy would grow
by 8.1 percent this year and 8.2 next year -- the highest among the
projections made by international institutions.
"Overall, I think
the authorities in India have done a very good job over the past two
years and this is actually reflected in some indicators," Ingo Pitterle,
a UNDESA Economic Affairs Officer and India expert, told IANS in an
interview here Tuesday.
"In 2013 India was group grouped together
with Turkey, South Africa, Indonesia and Brazil, and considered a
fragile economy. And now, you look at the same variables -- today, they
look very different," Pitterle said.
"When you look at the
currencies the story is India's is the only currency that has held up
well here, which is a sign of confidence by investors, by the
international community, in the Indian economy," he said.
Like
the UN report's outlook, Pitterle saw several positives on the Indian
economy. The rupee, had done better than most currencies, inflation was
down, monetary policy was prudent, current account deficit had declined,
external imbalances had reduced and oil prices had softened.
"The
changes that are being made are all going in the right direction, both
by the government and by the central bank. I have been following the
Indian economy now for seven years or so. I see a return to a high
degree of macro-economic stability."
Asked about the differences
in India's growth projections, Pitterle said he did not believe that a
growth of 8.1 percent or 7.6 percent really mattered -- neiher in the
medium term, nor in the long run.
"What is important is that it
is balanced growth, that it is the same (level of) growth, that it can
really have 5-10 years of this high growth period, without major
disruption, without causing excessive inflation, or other imbalances."
(Arul Louis can be contacted at [email protected])