The Asian Development Bank on Tuesday slashed India’s growth forecast to 7.4 per cent in 2015-16 from its earlier projection of 7.8 per cent in March on concerns over weak monsoons and stalled structural reforms as well as continued economic slowdown in developed economies.
“In addition to slower than anticipated global growth, the revisions reflect expectations that reforms and improved investor confidence needed to bolster the economy could be months away and could still be set back by potential global market turmoil,” said ADB Chief Economist Shang-Jin Wei.
The ADB also revised India’s GDP growth projection for next fiscal to 7.8 per cent from its earlier estimate of 8.2 per cent. It also scaled down China’s growth forecast to 6.8 per cent in 2015 on the back of weak exports and slowdown in investments.
It highlighted that a pick-up in investments is vital. “While investment conditions have improved, challenges still remain,” said the report, warning that de-bottling stalled infrastructure projects and moving ahead with pending reforms including those for taxes, land acquisition, and labor laws are necessary to improve the investment climate.