As per interim economic outlook report of Paris based Think Tank Organisation for Economic Cooperation and Development (OECD), the Indian economy is expected to grow by 7.2% this fiscal.
- It will be followed by 7.3% in 2016-17 and 7.4% in 2017-18 periods.
- The latest figures are slightly lower than the projection of 7.3% in 2015-16 and 7.4 % growth in 2016-17 made by OECD in June 2015.
Reasons behind India’s robust economic growth projection
Despite of large non-performing loans, high leverage ratios for some companies and difficulty in passing key structural reforms, it is largely financed by rising foreign direct investment inflows.
- Public investment has picked up with faster clearance of key projects.
- Better infrastructure and greater ease of doing business are promoting private investments.
- Generous benefits and wages for public employees are supporting private consumption.
Caution for India
OECD cautioned that India may face difficulty in passing key structural reforms and large non-performing loans which are pulling it back.
- OECD has cut the global growth forecast for this year to 9%.
- It has projected a strengthening of global growth to 3% in 2016 and 3.6% in 2017.
- Brazil and Russia have experienced recessions and will not return to positive growth in annual terms until 2017.
The Organisation for Economic Co-operation and Development (OECD) is an international economic organisation of 34 countries to stimulate economic progress and world trade.
- It was established as Organisation for European Economic Co-operation (OEEC) in 1948 but reformed as OECD in 1961.
- Headquarter – Paris, France