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The World Bank has said that India is expected to grow at 5.6 per cent in current fiscal i.e. 2014-15. The growth is expected to accelerate further to 6.4 per cent in 2015-16 and 7 per cent in 2016-17.
"India's long run growth potential remains high due to favourable demographics, relatively high savings and policies and efforts to improve skills and education, facilitate domestic market integration and incentivise manufacturing activities," the Bank said in a report titled 'India Development Update'.
External shocks
However, it said that external shocks such as financial market disturbance, slower global growth, higher oil prices and geo political tensions could have adverse impact on baseline trajectory.
At the same time, there are some domestic risks such as challenges to energy supply and fiscal pressures from weak revenue collection in the short-term and the 7th pay commission's recommendation on public sector remuneration in the medium term.
On the other hand, further progress on reform agenda, particularly the implementation of Goods and Services Tax, which could transform India into a common market and dramatically boost its competitiveness, may help offset both domestic and external risks to outlook.
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