India's GDP growth rate to reach 8 per cent by 2017: World Bank

Discussion in 'Economy & Infrastructure' started by Rashna, Apr 14, 2015.

  1. Rashna

    Rashna Senior Member Senior Member

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    India's GDP growth rate to reach 8 per cent by 2017: World Bank



    WASHINGTON: The World Bank has predicted a GDP growth rate of 8 per cent for India by 2017 and said that a strong expansion in the country, coupled with favourable oil prices, would accelerate the economic growth in South Asia.

    In India, GDP growth is expected to accelerate to 7.5 per cent in fiscal year 2015/16. It could reach 8 per cent in FY 2017/18, on the back of significant acceleration of investment growth to 12 per cent during FY 2016-FY 2018, the bank said in its semi-annual report.

    The country is attempting to shift from consumption to investment-led growth, at a time when China is undergoing the opposite transition, it said.

    The bank's twice-a-year South Asia Economic Focus report projected steady increase in regional growth from 7 per cent in 2015 to 7.6 per cent by 2017 on grounds of strong consumption and increasing investment.

    Given India's weight in regional Gross Domestic Product, the projections reflect to a large extent India's expected growth acceleration, driven by business-oriented reforms and improved investor sentiment.

    The decline in oil prices has been reflected in the domestic prices of oil products to different extents across the region. The pass-through exceeded 50 per cent for most oil products in Pakistan, but was nil in Bangladesh, it said.

    Together with favorable food prices, cheaper oil has contributed to a rapid deceleration of inflation. South Asia went from having the highest inflation rate among developing regions to having the lowest in barely one year.

    In March 2013, the Consumer Price Index (CPI) of the region had increased by 7.3 per cent year-on-year compared to 1.4 per cent in March 2015, the report said.

    "The biggest oil price dividend to be cashed in by South Asia is one yet to be earned, but it is not one that will automatically transit through government or consumer accounts," said World Bank South Asia Chief Economist Martin Rama.

    "Cheap oil gives the opportunity to rationalize energy prices, reducing the fiscal burden from subsidies and contributing to environmental sustainability," he said.

    The report noted India has already taken encouraging steps to decouple international oil prices from fiscal deficits and to introduce carbon taxation to address the negative externalities from the use of fossil fuels.

    The challenge will be to stay the course in the event of oil price hikes, something that may well happen in the medium- term.

    "Savings from reduced subsidy bills could be used to address the crying needs of the region in terms of infrastructure, basic services and targeted support for the poor," said World Bank vice president for South Asia Annette Dixon.

    The report shows that households in the region stand to gain from lower oil prices, both directly through lower energy spending and indirectly through faster growth. But except for kerosene, richer households spend more in oil products, and stand to gain more.

    India's GDP growth rate to reach 8 per cent by 2017: World Bank - The Times of India
     
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  3. Rashna

    Rashna Senior Member Senior Member

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    Who benefits the most from falling Oil prices? India :)



    [​IMG]
     
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  4. Samar Rathi

    Samar Rathi Regular Member

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    Indeed but looks like they gonna be up after all it's middle east we are talking about.
     
  5. genius

    genius Regular Member

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    In western countries, growth is synonymous with social welfare and the little guys gets something in the form of education, healthcare benefits, unemployment benefits, etc. In the Indian context, however, growth means the big industries will grow while the common man bears the brunt of rising prices, taxes, etc.
     
  6. Rashna

    Rashna Senior Member Senior Member

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    This is what the oil experts think.


    Predicting the oil price is a bit of a mug's game.
    There are simply too many variables involved to make any kind of meaningful, definitive forecast.
    What we do know is that, despite a recent upturn, the price of oil has slumped almost 50% since last summer following the longest-running decline for 20 years.
    And we know why - US shale oil, and to a lesser extent Libyan oil returning to the market, has pushed up supply while a slowdown in the Chinese and EU economies has reduced demand.
    Add to the mix a strong US dollar making oil more expensive in real terms, pushing demand even lower, and you have a recipe for a plummeting oil price.
    What happens next is a little harder to see.
    With the booming US shale industry showing little signs of slowing, and growing concerns about the strength of the global economy, there are good reasons to suspect that the current slump in the oil price will continue for some time.
    Brent crude oil price chart
    This is precisely when Opec, the cartel of major global oil producers, would normally step in to stabilise prices by cutting production. It has done so many times in the past, so often in fact that the market expects Opec to intervene.
    This time it hasn't. In a historic move at the end of last year, Opec said not only that it would not cut production from its 30 million barrels a day (mb/d) quota, but had no intention of doing so even if oil fell to $20 a barrel.

    And this was no empty threat. Despite furious opposition from Venezuela, Iran and Algeria, Opec kingpin Saudi Arabia simply refused to bail out its more vulnerable cohorts - many Opec members need an oil price of $100 or more to balance their budgets, but with an estimated $900bn in reserves, Saudi can afford to play the waiting game.
    Opec now supplies a little over 30% of the world's oil, down from almost 50% in the 1970s, partly due to US shale producers flooding the market with almost 4 mb/d from a standing start 10 years ago.
    "Given this scenario, who should be expected to cut production to put a floor under prices?" Opec argued last month.

    'Serious risks'
    Without Opec artificially supporting the oil price, and with potentially weaker demand due to sluggish global economic growth, the oil price is likely to remain below $100 for years to come.
    The futures market suggests the price will recover slowly to hit about $70 by 2019, while most experts forecast a range of $40-$80 for the next few years. Anything more precise is futile.

    At these kinds of prices, a great many oil wells become uneconomic. First at risk are those developing hard to access reserves, such as deepwater wells. Arctic oil, for example, does not work at less than $100 a barrel, says Brendan Cronin at Poyry Managing Consultants, so any plans for polar drilling are likely to be shelved for the foreseeable future.


    Are low oil prices here to stay? - BBC News

     
  7. Rashna

    Rashna Senior Member Senior Member

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    When GDP per capita starts to improve people will have better income and thus spending capacity. A robust growth also helps the govt. in allocating more percentage of its budget towards education, health, and food security etc. ( in the context of India). Social welfare is a very broad term in the sense the food security bill can ensure people don't go hungry but it may not include unemployment dole like the west. To reach that status we have to halve our population.



     
    Last edited: Apr 14, 2015
  8. Samar Rathi

    Samar Rathi Regular Member

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    I don't understand how can someone compare india with any other country as we are multi linguistic ,ethnic,culture country. Some people just need reason to blame someone to objectify their problems.
     
  9. Rashna

    Rashna Senior Member Senior Member

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    Well he isn't completely wrong but the ideal model of things never applies to India because we just can't be compared to anyone given our population. If we compare ourselves to China even then the model of governance in china vis-a-vis India is incomparable. China is also a guarded economy which only lets out what it wants. How much of it is true nobody knows. So we will have to make our own benchmarks in the days to come. Just like we can't expect oscars for bollywood masala films, same way we can't expect to do what the west does.

     
  10. Samar Rathi

    Samar Rathi Regular Member

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    Exactly my point and given the fact when India was enjoying 7-10 % GDP growth from 1990 to 2010 ,it was the period when we lifted millions of people out of poverty so yes Industrial growth do create difference between poor and rich but it lift poor from sab-Saharan ones to middle class ones and likewise millionaire to billionaire.

    poor to rich gap increase but in broad way poor living condition improves .Our peoples need job and not freebies .# Jobs over subsidies
     
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  11. Rashna

    Rashna Senior Member Senior Member

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    India has lifted a huge chunk of its population out of poverty. But the definition of poverty itself is a debatable issue. Even there i think we need to get out of the dollar benchmark and have our own benchmark. Real growth will come out of realistic approach rather than trying to plot the western development curve. INdian population is still in lower middle income group.

    India
    South Asia
    Income level
    Lower middle income GDP (current US$) $1.877 trillion 2013
    Population, total 1.252 billion 2013

    India | Data


     
    Last edited: Apr 14, 2015
  12. Srinivas_K

    Srinivas_K Senior Member Senior Member

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    India will hit the double digit GDP growths similar to China in the past Decade !
     
  13. Rowdy

    Rowdy Co ja kurwa czytam! Senior Member

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    We need a denser social safety net
     
  14. Samar Rathi

    Samar Rathi Regular Member

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    I never understand how can anyone measure Indian poverty from american dollar term? (think about it rationally)

    look at this report

     
  15. Rashna

    Rashna Senior Member Senior Member

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    We measure everything in USD terms including GDP, this is the reason why cost of living and purchasing power everything will be in dollar terms.


     
  16. Samar Rathi

    Samar Rathi Regular Member

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    That's a paradox we live in but you can't compare western social status vs Indian social status. Look if many people from west will visit Harayana then by looking at people clothes and simplicity will call them poor but in reality they are millionaire.
     
  17. Sakal Gharelu Ustad

    Sakal Gharelu Ustad Detests Jholawalas Moderator

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    That's why people look at per capita income and not clothes. Haryana is one of the richest states in India.
     
  18. Rashna

    Rashna Senior Member Senior Member

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    That is true. India has 100 billionaires now. (Rank 3)

    India is home to as many as 14,800 multi-millionaires and is the eighth largest group of super-rich people in the world, a report says. Moreover, the country's financial capital Mumbai with 2,700 multi-millionaires, is among the top 25 cities globally for multi-millionaires.(Rank 8)


     
  19. Samar Rathi

    Samar Rathi Regular Member

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    I think you didn't get my point ,yes per captia income matters but not in dollars but in rupees as commodity values differ too much in west and India.
     
  20. Sakal Gharelu Ustad

    Sakal Gharelu Ustad Detests Jholawalas Moderator

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    That is why there is a concept called PPP(purchasing power parity). Also, you have funny ways to look at it: Interactive currency-comparison tool: The Big Mac index | The Economist
     
  21. Samar Rathi

    Samar Rathi Regular Member

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    Last edited: Apr 14, 2015

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