Asian Development Bank (ADB) sees the Indian economy growing at six per cent this fiscal.
The Indian economy could even return to 8-9 per cent growth levels if the country were to get its investment story right, Rajat Nag, Managing Director General, ADB, said at the 46th Annual Meet of the bank here today.
The ADB growth forecast of six per cent is better than the Reserve Bank of India’s latest growth projection of 5.7 per cent for the current fiscal.
It is, however, lower than the 6.1 per cent growth forecast put out by the World Bank and 6.4 per cent growth expected by the Prime Minister’s Economic Advisory Council.
Painting an optimistic picture about India’s growth prospects, Nag said India’s growth story will be driven by investments.
“There is need for structural reforms on the investment side. If legislations are passed on direct taxes and GST, then India can get to 8-9 per cent growth level. That is our reading. Only time will tell,” Nag said.
Nag also said that recent softening in global commodity prices will have a positive impact on India and may lead to some improvement in the current account deficit (CAD) situation.
He, however, does not see commodity prices falling below the current level as the global demand has picked up.
ADB sees India’s inflation moderating to 7.2 per cent in 2013-14 and 6.8 per cent in 2014-15.
As regards CAD, ADB sees it coming down to 4.4 per cent of GDP in 2013-14 from a level of about five per cent last year.
ADB sees India’s CAD coming down to four per cent in 2014-15.
Nag said ADB’s concern was more about the quality of economic growth rather than the quantity.