Hope that India will get back to 7% or better GDP growth and sustain it

The Blackrock and the Confederation of Indian Industry are optimistic that India can get to 7% GDP growth in 2015 and sustain it at that level.

BlackRock expects India’s GDP growth to accelerate to 7% annually in 2015, 2016 and beyond – when many other emerging economies are expected to slow. This will be driven by implementing half-finished projects. Risks include a re-run of the 2013 bloodbath in emerging markets in anticipation (or fear) of a US rate rise. India is in better shape these days, yet the country is still dependent on external funding.

CII says India will emerge from the shadows of recession. A stronger and a resurgent India is well poised to grow at 5 to 7% over world economic growth and continue to power ahead in terms of domestic demand and investment attractiveness.

India like China have statistical issues with the official GDP. Official figures on gross domestic product in India are released with significant delay—Friday’s numbers will describe the quarter that ended two months ago—and are revised, often dramatically, for years following the initial release. India has been revising its GDP upwards. The data don’t get seasonally adjusted, which means longer-term trends can be obscured by things like festivals and harvests. The result is that banks and analysts each end up following their own favorite nontraditional indicators—rail freight, steel production, auto sales, activity on job-hunting websites—to get a better, timelier sense of the economy’s direction than the one provided by the official stats. Manufacturing output, as measured by the Index of Industrial Production, turns out to be a very good GDP proxy all-around.

A CII projection of investment requirement in the Indian economy over the next five years (2014/15 to 2018/19) for achieving an average growth of 7 per cent per annum, the Confederation of Indian Industry (CII) has estimated the figure at Rs. 280 lakh crore (USD 4.7 trillion), which is nearly double the value of Rs. 139 lakh crore (USD 2.9 trillion) that was invested in the last 5 years.

A CII study titled ‘Investment Requirements in India: 2014/15 to 2018/19’, has also estimated sectoral investment targets. Monetary, fiscal, trade and other relevant policies could be realigned to help the economy mobilize the required investment, according to the study.

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