BackInto the fast lane
New World Bank forecasts say India is the only major economy that will see its growth rate increase consistently in the coming year
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There is now a growing consensus that the Indian economy is headed towards a sweet spot. The crash in global oil prices is a further plus.
The new forecasts of economic growth released by the World Bank this week tell an interesting story. India is the only major economy that will see its growth rate increase consistently in the coming years. India is even expected to outpace China by 2017. It will then be the fastest growing major economy in the world.
There are two cautionary facts. One, such medium-term forecasts sometimes go wrong, so the Narendra Modi government has to avoid the mistake made by the previous regime when it assumed that rapid growth was a given. Two, India will still grow at far less than the double-digit pace that many hoped for not too many years ago.
To realize the forecast, India needs a stable macroeconomic policy combined with structural economic reforms. The budget should focus on those.
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