India must push on with economic reforms as back tracking on such initiatives will impact growth as well as foreign investments,a senior banking official said here today.
“It is disappointing that India back tracks on reforms,” said David Carbon,Managing Director,Economic and Currency Research at the DBS Bank.
Two years ago,India was projected to have an annual economic growth of 9 per cent,supported by reforms of sectors such as retails,insurance and land,he pointed out.
But back tracking on such reforms has lowered the annual Indian economic growth to about 7 per cent,said Carbon on the sidelines of the DBS Asia Markets conference 2012.
DBS estimated Indian economic growth at 6.7 per cent in 2011-12,and slowing to 6.5 per cent in 2012-13.
Meanwhile,suggesting a rebound,the Indian government earlier this month had projected the economy to grow by about 7.6 per cent in the next fiscal,up from 6.9 per cent estimated in 2011-12 on the back of declining inflation and softening interest rate.
Reforms would also help India tackle its inflation rate,which becomes challenging in high growth environment,said Carbon.
India,along with China,has been driving Asian growth despite the economic problems in Europe and the US.
In his presentation at the conference,Carbon highlighted Asian economic re-acceleration this year despite the weak US and EU economies and drop in their imports from Asia.
Exports among the Asian markets have offset the big 11 per cent drop in exports to Europe between August 2011 and January 2012,Carbon said.
Asian consumption has boosted the region’s economic growth as,among other drivers,industrial production was surging in the first quarter of this year,he said.
Asian gross domestic growth expanded by 6.7 per cent in the fourth quarter of last year with uptrend in growth in the first quarter of this year.
Comparatively,quarter-on-quarter growth fell from 9.9 per cent in the first quarter of last year to 5.4 per cent each in the second quarter and third quarter.