A US government report has sought to contest India’s claim of being the world’s fastest-growing major economy, joining sceptics to say the claim of 7.6 per cent growth in 2015-16 may be “overstated”. The report by the Bureau of Economic and Business Affairs of the US Department of State added India has been “slow to propose other economic reforms that would match its rhetoric”.
“Ostensibly, India is one of the fastest-growing countries in the world, but this depressed investor sentiment suggests the approximately 7.5 per cent growth rate may be overstated,” the report said. But it didn’t offer any data analysis to back its own claim. Rather, it appears to have bought the theory of sceptics of the new GDP series who say India’s decent economic growth figures don’t match other high-frequency indicators like falling exports and imports, and low industrial output expansion and credit growth.
According to the Central Statistics Organisation, India grew 7.6 per cent in 2015-16, the highest in the current series with 2011-12 as the base year and compared with 7.2 per cent a year before.
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Continuing its criticism of India’s intellectual property right (IPR) regime, the report said: “Prime Minister (Narendra) Modi’s courtship of multinationals to invest and ‘Make in India’ has not yet addressed longstanding hesitations over India’s lack of effective IPR enforcement.” As such, the US has retained India on its priority watch list in its annual Special 301 report. India, however, has maintained that its IPR regime is fully WTO-compliant and that the 301 report on IPR is a “unilateral” move by the US. The report, however, admitted that the government has “made some progress in fulfilling its mandate to build a cleaner, more market-oriented and more competitive India (in IPR)”.
It said the 2014 Lok Sabha elections marked a turning point in investor sentiment, as the earlier political regime was displaced in favour of a government that had won on a platform of economic growth. “Additionally, the monetary stewardship of Raghuram Rajan, the … Governor … of the Reserve Bank of India, further boosted investor sentiment,” it added. However, although the government focused on streamlining bureaucratic decision-making and raising FDI limits in certain sectors, it has been slow to propose other economic reforms that would match its rhetoric, and many of the reforms it did propose have struggled to pass through Parliament. FE