Skip to main content

World Bank steps up pressure, tells India to quickly "reform" economy, lest 7.7% growth not achieveable in 2017

By Our Representative
Amidst continued apprehensions that Prime Minister Narendra Modi does not seem interested in his announced neo-liberal "economic reforms" to further open up the Indian economy to world investors, the World Bank has stepped up its pressure saying India can achieve 7.7 per cent rate of growth in 2017 only if it early quickly moves in that direction; lest it would miss the bus.
The World Bank, even as releasing its report titled, "South Asia Economic Focus Spring 2016: Fading Tailwinds", has stated, "Economic growth in India expected to be 7.7 percent in 2017 compared to 7.5 percent in 2015", but warns Indian policy makers that "delays in the adoption and implementation of key reforms could affect investor sentiment."
The remark comes amidst the Government of India failing to bring about a consensus on dropping what the World Bank believes was a "retrograde" land acquisition Act, 2013. Also, there are few efforts, the World Bank point of view, to try to drop subsidies going into the agriculture sector.
It said, "Favorable overall trends mask important underlying divergences: between urban and agricultural households; between domestic and external demand; and between public and private capital expenditure, which should be addressed."
Pointing out that, thanks to India, South Asia "remains world's fastest growing region, but should be vigilant to fading tailwinds, it said the country's economy can look up if it is "supported by a rebound in agriculture and stimulus from civil service pay reforms", the World Bank underlines, the region "should worry about global turbulent."
The World Bank said, "Led by robust growth in India, South Asia shows resilience in the face of turbulent international markets and remains the fastest-growing region in the world, with economic growth forecasted to gradually accelerate from 7.1 percent in 2016 to 7.3 percent in 2017."
In a twice-a-year report, "South Asia Economic Focus", the World Bank said, "The region’s economic performance prospects remain strong due to its limited exposure to global turbulence, coupled with increasing investment activity."
"However", it pointed out, "There are also signs of fading tailwinds. Capital flows to the region have declined and remittances from oil exporting countries have started to weaken."
It further said, "Fuel and food prices remain low but are unlikely to keep falling. As a result overall output growth is slower than previously anticipated and inflation has recently been creeping up."
"Given its weight in the region, India sets the pace for South Asia as a whole", the World Bank said.
It added, "Economic activity is expected to accelerate from 7.5 percent in FY2016 to 7.7 percent in FY2017 based on the expectation of strong private investment, a push in infrastructure spending, an improved investment climate, and deleveraged corporate and financial balance sheets."
Quoting Annette Dixon, World Bank South Asia Vice President, the report said, “However, fiscal and financial vulnerabilities remain and countries should strive to address them through generating revenue and creating more fiscal space.”
The report’s analysis of fiscal policy across the region suggests that governments need to find a balanced path towards fiscal consolidation.
“Fiscal policy has a wide range of impacts for development. The fiscal deficit affect macroeconomic stability, capital expenditures are needed for growth, and taxes and social spending matter for equity,” the report quotes World Bank South Asia Chief Economist Martin Rama as saying.
"With the currently low oil prices, this is also an opportune time for South Asian policy makers to introduce or expand explicit carbon taxes. This would improve environmental and fiscal sustainability at the same time”, Rama insisted.
"Many South Asian countries show potential for accelerated growth in the short to medium term. However, the tailwinds of high levels of remittances coupled with low oil prices may be slowing down so countries should be well prepared for a more difficult global environment", the report said.

Comments

TRENDING

US research: 40% of India's casteist Facebook posts are anti-reservation, anti-Dalit

By Rajiv Shah
A recent American civil society research has found that 40% of India's casteist posts on Facebook (FB) have anti-reservation slant. Asserting that the reservation policy in India is similar to affirmative action in the United States, the research study, titled "Facebook India: Towards The Tipping Point of Violence Caste and Religious Hate Speech", says, this type of hate content on FB is mainly directed against Dalits and Adivasis.

Sanjiv Bhatt paying price for deposing on Modi role in Gujarat riots: Wife Shweta

Counterview Desk
Following the Jamnagar sessions court ordering life imprisonment to former IPS officer Sanjiv Bhatt for his alleged involvement in three decades old custodial death case, his wife Shweta Bhatt has said that he has been sentenced for a “for a crime he did not commit”, even as criticizing the Indian Police Service (IPS) Association, Gujarat, for not standing up for him.

Senior advocates targeted because they took up cases against Amit Shah: Lawyers' NGO

Counterview Desk
The Lawyers Collective (LC), an NGO claiming to promote human rights issues, has expressed surprise at the latest move by the Central Bureau of Investigation (CBI) to register an FIR against the Lawyers Collective (LC), its president Anand Grover and unknown office bearers for alleged violation of the Foreign Contributions Regulation Act (FCRA).

How Gujarat govt imposed curbs on livestock export for 'fear' of losing BJP vote share

By RK Misra*
Insidious are the ways authorities function, preaching one thing, practicing quite another. Administrative muscle-flexing to suit political goals was on display when the BJP-led Vijay Rupani government in Gujarat banned the export of livestock days ahead of Eid. Even the Narendra Modi-led government expressed its intent to confirm it countrywide, but stopped short of doing so.

One of the least peaceful countries, India's global peace ranking deteriorates: Report

By Rajiv Shah
A just-released report has asserted that India's ranking in the Global Peace Index (GPI) is 141st among 163 countries, deteriorating by four ranks in a year. Ranking 163 countries by providing a score to each, the report, prepared by the Institute for Economics and Peace (IEP), headquartered in Sydney, Australia, has found India to be one of the least peaceful nations in the region.

Demand for Bharat Ratna to Dalai Lama as top RSS leader warns China of 'strong' action

Nava Thakuria*
Dharamshala: Indian supporters for a free Tibet have urged the Government of India to confer Bharat Ratna, the country’s highest civilian honour, on the Tibetan spiritual leader, the 14th Dalai Lama, for his “immense contributions” in creating goodwill for India in the last six decades. A declaration, adopted at the 6th All-India Tibet Support Groups’ Conference held on June 15 and 16 in Dharamshala township of Himachal Pradesh, said that the Nobel laureate continues to be a holy ambassador of Indian culture enriched with non-violence, compassion and religious harmony.

Sabarmati 'cleaned up' swimming pool style: Untreated effluents discharged in river

Counterview Desk
In a fresh letter to the secretary, Ministry of Environment, Forests and Climate Change (MoEFCC), Government of India, senior Gujarat environmentalists Rohit Prajapati and Krishnakant of the Paryavaran Suraksha Samiti (PSS) have taken strong objection to the recent clean-up drive of the about 11.3 km stretch of Sabarmati riverbed undertaken by the Ahmedabad Municipal Corporation (AMC), terming it as “swimming pool type clean-up.” The river’s total length is 371 km.

Jharkhand mob lynching: Adivasis protest police 'inaction', FIR against victims

Counterview Desk
The Jharkhand Janadhikar Manch (JJM), a civil rights network, on Monday sponsored a protest against the police action against the Adivasi victims of the lynching which took on April 10, 2019, in Jurmu village of Dumri block in Gumla district of Jharkhand. The incident led the death of Prakash Lakda, aged 50.

Gujarat govt 'considers' temples, charitable institutions as shops and establishment

By Pankti Jog*
The Gujarat state assembly recently passed a new law which would "govern" the working condition of shops and establishments. One of the most talked about provisions of the Act is, it allow shops and establishments across Gujarat to function 24 hours.

There is no 'separate' Kashmir story, as there is for Afghanistan, Nepal, Tibet, Palestine

By Mohan Guruswamy*
Kashmir is the northernmost geographical region of South Asia. Until the mid-19th century, the term "Kashmir" denoted only the valley between the Great Himalayas and the Pir Panjal mountain range. The name Kashmir derives from the Sanskrit Kashyapmeru. The Greeks knew it as Kaspeiria. Herodotus called it Kaspatyros.