The Indian economy will grow 7.4 per cent this fiscal and 7.6 per cent in the next as the bankruptcy and GST laws will help create a better business friendly environment.
This is as per the Asian Development Bank (ADB).
Ahead of its 50th annual meeting to be attended by finance minister and central bank governors of member nations, ADB indicated new bankruptcy law will make it easier to do business in India.
The growth rate compares to 7.1 per cent of the previous fiscal.
Over 7 per cent growth rate is high if one compares it to other emerging market economies and also China.
Behind this is cyclical factor, improved terms of trade. The Indian government adopted new bankruptcy law that improved the business enabling environment.
That is the a short-term and medium-term factor behind the gross acceleration in India.
On the impact of demonetisation of old 500 and 1,000 rupee notes that took out 86 per cent of the currency in circulation, it obviously generated short-term decline in cash-based transactions and consumer sentiment.
ADB has not studied if the demonetisation had any consequences on black money.
The GST, the biggest indirect tax reform since independence, together with the new bankruptcy law are big positives for India.
The bankruptcy law and the GST will help in creating a better business enabling environment, which seems to be a factor behind this gross acceleration of India,.
The rupee strengthened to 64.2 against the US dollar and has been gaining strength as compared to other emerging economy currencies.
The rupee has appreciated by over 5 per cent against the US dollar since January. ADB: Know More
- Headquarters: Mandaluyong, Philippines
- President: Takehiko Nakao
- Founded: 19 December 1966
- Membership: 67 countries
- Staff: 2997 employees
- Purpose: Economic development
- Motto: Fighting poverty in Asia and the Pacific