IMF projects India's growth at 7.3 per cent in 2018, 7.4 per cent next year
Washington, Oct 9 : India is projected to grow at 7.3 per cent in 2018 and 7.4 per cent next year, the IMF said Tuesday, predicting that the country will regain the tag of the world's fastest growing major economy this year, surpassing China with more than 0.7 percentage points.
In 2017, India had clocked a 6.7 per cent growth rate.
In India, important reforms have been implemented in the recent years, including the Goods and Services Tax (GST), the inflation-targeting framework, the Insolvency and Bankruptcy Code, and steps to liberalise foreign investment and make it easier to do business, the International Monetary Fund (IMF) said in its latest World Economic Outlook (WEO) report.
"India's growth is expected to increase to 7.3 per cent in 2018 and 7.4 per cent in 2019 (slightly lower than in the April 2018 World Economic Outlook (WEO) for 2019, given the recent increase in oil prices and the tightening of global financial conditions), up from 6.7 per cent in 2017," it said in the WEO report.
This acceleration, the world body said, reflected a rebound from transitory shocks (the currency exchange initiative and implementation of the GST), with strengthening investment and robust private consumption.
India's medium-term growth prospects remain strong at 7 per cent, benefiting from the ongoing structural reforms, but have been marked down by just under a half percentage point relative to the April 2018 WEO, it said.
If projections are true, then India would regain the tag of the fastest growing major economy of the world, crossing China with more than 0.7 percentage points in 2018 and an impressive 1.2 percentage point growth lead in 2019.
China was the fastest growing economy in 2017 as it was ahead of India by 0.2 percentage points. For the record, the IMF has lowered the growth projections for both India and China by 0.4 per cent and 0.32 per cent, respectively, from its annual April's WEO.
Released in Bali during the annual meeting of the IMF and the World Bank, the IMF's flagship WEO said its 2019 growth projection for China is lower than in April, given the latest round of US tariffs on Chinese imports, as are its projections for India.
In China, growth is projected to moderate from 6.9 per cent in 2017 to 6.6 per cent in 2018 and 6.2 per cent in 2019, reflecting a slowing external demand growth and necessary financial regulatory tightening, the report said.
The 0.2 percentage point downgrade to the 2019 growth forecast is attributable to the negative effect of recent tariff actions, assumed to be partially offset by policy stimulus, it said.
Over the medium term, growth is expected to gradually slow to 5.6 per cent as the economy continues to make the transition to a more sustainable growth path with continued financial de-risking and environmental controls, it noted.
"Owing to these changes, our international growth projections for both this year and next are downgraded to 3.7 per cent, 0.2 percentage point below our last assessments and the same rate achieved in 2017," the report said.
The growth rate of the US for 2018 is 2.9 per cent and that of 2019 has been powered to 2.5 per cent.
"Looking ahead, renewed impetus to reform labour and land markets, along with further improvements to the business climate are also crucial (in India)," it said.
According to the WEO, in India, reform priorities include reviving bank credit and enhancing the efficiency of credit provision by accelerating the cleanup of bank and corporate balance sheets and improving the governance of public sector banks.
In India, a high interest burden and risks from rising yields require continued focus on debt reduction to establish policy credibility and build buffers.
"These efforts should be supported by further reductions in subsidies and enhanced compliance with the Goods and Services Tax," the IMF report said.
It also said inflation in India is on the rise, estimated at 3.6 per cent in fiscal year 2017/18 and projected at 4.7 per cent in fiscal year 2018/19, compared to 4.5 per cent in fiscal year 2016/17, amid accelerating demand and rising fuel prices.
The report said that aggregate growth in the emerging market and developing economy group stabilised in the first half of 2018.
Emerging Asia continued to register strong growth, supported by a domestic demand-led pickup in the Indian economy from a four-year-low pace of expansion in 2017, even as activity in China moderated in the second quarter in response to regulatory tightening of the property sector and nonbank financial intermediation, it added.
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Haryana land deal: Robert Vadra appears before ED on 3rd day
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New Delhi (PTI): Robert Vadra, the businessman brother-in-law of Leader of Opposition in Lok Sabha Rahul Gandhi, appeared before the ED on the third straight day on Thursday for questioning in a money laundering case linked to alleged irregularities in a 2008 Haryana land deal case.
The 56-year-old has been questioned for over ten hours in the last two days as part of the investigation and the recording of his statement process under the Prevention of Money Laundering Act (PMLA) will continue Thursday, officials said.
He reached the ED office in central Delhi shortly after 11 am accompanied by his wife Priyanka Gandhi Vadra, who is MP from Wayanad.
Vadra had called the ED action borne out of "political vendetta" against him and his family, and said that while he has always cooperated with the agency and furnished thousands of pages of documents, he needed a "closure" in these cases which are almost 20 years old.
The probe against Vadra is linked to a land deal in Haryana's Manesar-Shikohpur (now sector 83) in Gurugram.
The deal of February 2008 was done by a company named Skylight Hospitality Pvt Ltd, where Vadra was a director earlier, as it purchased a 3.5 acre of land in Shikohpur from Onkareshwar Properties at a price of Rs 7.5 crore.
A Congress government led by Bhupinder Singh Hooda was in power at that time. Four years later, in September 2012, the company sold the land to realty major DLF for Rs 58 crore.
The land deal got embroiled in controversy in October 2012 after IAS officer Ashok Khemka, then posted as the director general of Land Consolidation and Land Records-cum-Inspector-General of Registration of Haryana, cancelled the mutation of this categorising the transaction as violative of state consolidation Act and some related procedures.
The BJP, which was in opposition then, had termed the case an instance of "corruption" in land deals and that of "nepotism", hinting at Vadra's kinship with the first family of the Congress party.
Haryana Police had filed an FIR to probe this deal in 2018.
Vadra has been questioned multiple times by the federal probe agency in two different money laundering cases earlier.
Sources told PTI that the ED will soon file chargesheets in all these three cases being investigated against Vadra.
