World Bank may revise India's growth projection, says Kaushik Basu

Basu indicated that India's dominance in growth will continue due to a couple of reasons

World Bank Chief Economist Kaushik Basu on Saturday indicated the Bank might revise its gross domestic product (GDP) growth projection for India, after it goes for a stocktaking in a few months.

“There could be some changes in the January review of India’s growth forecast,” Basu said.

He was responding to media queries on whether failure of the Centre to get the Goods and Services Tax (GST) Bill passed would have an impact on the projection.

“Decision-making and reforms can have an impact in terms of growth rate and the fact that a couple of important decisions did not go through could have an impact. But India is dominating for a couple of reasons,” Basu said here on Saturday. Recession in Brazil and Russia and slowdown in China have made India the leading economy in terms of growth prospects for the first time this year, Basu said.

Until October, the World Bank retained India’s growth forecast at 7.5 per cent for 2015-16 and expected it to be 7.8 per cent in 2016-17 and 7.9 per cent in 2017-18. Basu indicated India’s dominance in growth would continue due to a couple of reasons. “China has slowed a lot and would go below seven per cent growth, and Russia and Brazil are in recession,” Basu said.

“But, what is helping India is a positive general mood which helps investment climate. The crude oil price drop is also helping India and Bangladesh,” he said.

He, however, did not clarify on whether the uncertainty over the country-wide sales tax reform would influence the investment sentiment and the projection.