The Asian Development Banks forecast that India’s growth rate could surpass that of China owing to the government’s pro-investment attitude, which, coupled with an improvement in macroeconomic indicators and forward movement in resolution of structural bottlenecks, has propelled the country back on foreign investors’ radar.
“India is expected to grow faster than China in the next few years,” ADB chief economist Shang-Jin Wei said while releasing the bank’s annual publication Asian Development Outlook, 2015.
According to ADB, India’s economic growth in 2016-17 will be 8.2 per cent — something which the Economic Survey for 2014-15 had said India would achieve in 2015-16. The higher growth in 2016-17 is expected to come on the back of easing monetary stance by the Reserve Bank of India (RBI) and a pick-up in capital expenditure.
The Indian government’s pro-investment attitude, improvement in the fiscal as well as the current account deficit situation, and some forward movement on resolving structural bottlenecks have helped improve the business climate, making India attractive again to both domestic and foreign investors, he added.
On an external sector, the bank’s chief economist, said that the Indian government and the Reserve Bank of India have been trying to build up reserves and frame policies to monitor risk.