India is likely to grow at 7.6% in 2017: UN report

The Dollar Business Bureau

India's economy is likely to grow at the rate of 7.6% in 2017 led by rebound in investment and strong manufacturing base coupled with the implementation of Seventh Pay Commission and Goods and Services Tax (GST) regime, said a UN study.

“India's economy is projected to sustain a 7.6% growth rate in both fiscal years 2016-17 and 2017-18,” as per the year-end update of the UN’s flagship report Economic and Social Survey for Asia and the Pacific 2016.

The continuing structural reforms are likely to benefit the private investment in the country.

In India, though the economic growth in first quarter April-June of current fiscal was moderate due to shrinkage in fixed investment, a recovery is expected, the report said.

“Initially, the growth will be led by a rebound in agriculture on the back of normal monsoon, which along with pay revisions in civil service will help a broad-based growth in consumption,” it said.

“Later, the growth will be supported by a rebound in private investment as the current push to boost infrastructure spending and steps taken to create a better climate for investment such as the passage of GST Bill and bankruptcy code,” it added.

The report also credited India and China for stable growth in the Asia-Pacific region at a time when developed countries were struggling to maintain high growth rates.

However, the growth rate in China could see a bit of mellowing down to 6.4% next year. But rebalancing towards services, consumption and high value-added activities could make further growth, the report stated.

In addition, restructuring and deleveraging efforts in economies such as India and China should contribute to augment financial stability and high productivity, it added.