Source: Rediff.com

India, broader South Asian region remain steady amidst global slowdown

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IANS Tue, 10/11/2016 - 04:22 India, Pakistan

active resolution from the banking sector and their respective regulators. Despite this, the region is forecasted to grow 7.5 per cent by 2019 up from the 6.8 percent in 2015.

The WEO update for October mentions in that India's projected growth rate is expected to be 7.6 percent in 2016 and 2017. The global growth during the same timeframe is expected to be 3.1 percent in 2016 and 3.4 percent in 2017.

The report also mentions China's economic transition from a fast-investment-driven economy to a slow-consumption-driven economy. The report also goes on to note that Chinese policies over the years have a bearing on the working-age population in China, which is expected to turn negative over the next five years. This is in contrast to India, where in the decade ahead, India's working-age population is expected to stay positive.

The report's analysis of the Indian economy is spot on. It goes on to suggest that while crucial reforms and several positive measures have been undertaken, there are additional measures, which could boost productive capacity. These include measures to improve efficiency in the mining sector and electricity generation, improving labour market efficiency for leveraging the working population ratio and making it a demographic dividend rather than a disaster and full recognition of the losses of banks for improving the quality of financial intermediation.

The analysis in both these the reports offers sound reality check to policymakers and they should look into these areas of concern, both at country-level and even at the level of the state governments in India. Over the next few years, clear thinking and action on the points mentioned could be crucial in defining the future of not only India but the wider SAR.

(The article is co-authored with Sankalp Sharma, Senior Researcher at the Institute for Competitiveness, India. Amit Kapoor is Chair, Institute for Competitiveness & Editor of Thinkers. The views expressed are personal. Amit can be reached at amit.kapoor@competitiveness.in and tweets @kautiliya)

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