World Bank may review India’s GDP forecast

Economic slowdown in Brazil, Russia and China may boost India’s economy

Kaushik Basu, the Chief Economist of the World Bank, indicated that India’s growth forecast may witness ‘some changes’ in the bank’s January review. The Central Statistics Office (CSO) has released data indicating growth in the “vicinity of 7.5 per cent” for 2015-16, which is less than what was projected in the last Economic Survey. In this year’s Economic Survey, the Finance Ministry had projected GDP growth of 8.1-8.5 per cent. As of October, the World Bank’s forecast for India was retained at 7.5 per cent for the current financial year.

Prof. Basu, who also was the Chief Economic Adviser to the Government of India till 2012, said the government’s failure to get the Goods and Services Tax (GST) Bill passed may have an ‘impact’ on the GDP growth projection of the World Bank. “The detailed decision-making (by the government) can have an impact on the growth rate and that a couple of important decisions did not go through could have an impact.” Prof. Basu said. He, however, also said that economic slowdown in Brazil, Russia and China may boost India’s economy in the coming year.

“This is the first time India is leading major global economies in terms of growth forecast. India is dominating for a couple of reasons. China is growing below 7 per cent, Brazil and Russia are in recession. The general mood is positive for India which is helping the investment climate,” he added. A fall in crude oil prices is also ‘helping’ the economy, he said.

Prof. Basu was in the city to attend a two-day seminar on “Growth in West Bengal” at the Kolkata-based Indian Statistical Institute.