Souce: ADB, The Mint * As % of GDP

 

The Asian Development Bank (ADB) has given its estimates for GDP, inflation and current account balance for India. The picture does not look too rosy. As per ADB's estimates, India should be able to rein in inflation and current account deficit. But its growth would still not reach its full potential. The reasons for this are structural and policy related issues which continue to weigh down investments. Therefore it expects India's growth to increase to 6.5% by FY 15. This is higher than the 5% growth estimate for FY13 but much lower than the 9% levels that we had seen in the past. The reason for slower growth estimates is India's twin deficit problem. To ease this situation, the government has to step up on policy reforms. Though it has taken some steps on this front, but it still has to go a long way. Only when structural hindrances are removed, will there be a revival in investment. Investment will drive consumption which in turn will boost growth.