New Delhi: Domestic demand is expected to remain the main driver as India’s GDP picks up to grow at 7.2 per cent in 2018-19 and 7.3 per cent in 2019-20, the Asian Development Bank said on Wednesday. “The growth is forecast to pick up modestly to 7.2 per cent in FY 2019 on revived rural consumption, continued growth in private investment in response to improved bank and corporate balance sheets, more competitive domestic firms and products under the Goods and Services Tax, and less drag from net exports,” it said.
The Asian Development Outlook 2019 said growth slowed slightly in fiscal 2018 as expansion in agriculture and services slipped even though industry and investment strengthened. The current account deficit widened but remained modest while inflation continued to be benign. “Even with global headwinds, the outlook is for growth to edge up on strengthened domestic demand and bank and corporate fundamentals. Inflation and the current account deficit should remain tame. Enhancing export performance remains a key objective, which can be achieved by improving conditions for India’s participation in global value chains,” said the report.
“Domestic demand is expected to remain the main driver of growth. Steps to alleviate agriculture distress such as income support to farmers and strong hikes to procurement prices for food grains are expected to bolster rural demand,” it said adding the implementation of farmer income support will face some start-up challenges because it demands accurately linking land records with farmers’ bank accounts.
India to maintain highgrowth till 2021, says Naidu
India would continue to grow at a higher economic growth rate until 2021, Vice President M Venkaiah Naidu said while citing the World Bank estimates. While growth rates of developed economies and the entire world are expected to taper off, World Bank estimates suggest India would continue to grow at a high rate until 2021, Naidu said. “India (in) 2019 (will grow at) 7.3 pc, 7.5 pc in 2020 and 7.5 pc in 2021,” Naidu said while addressing the inaugural session of GRIDTECH 2019.