The Asian Development Bank (ADB) today retained its India GDP growth projection for 2015-16 at 7.8 per cent, but cautioned that delay in reforms relating to land acquisition and GST could hamper growth.
The Supplement to the Asian Development Outlook 2015, which was released in March, lowered the growth projections for China to 7 per cent for 2015, from the earlier 7.2 per cent. For 2016, it's forecast to decelerate to 6.8 per cent.
"In India, growth forecasts remain unchanged at 7.8 per cent in fiscal year (2015-16) and 8.2 per cent in 2016-17, supported by a healthy monsoon and new investments," ADB said in the supplement.
ADB said further "risks to growth prospects could emerge from further delay in passing some legislations crucial to easing land acquisition for industry and to implementing a uniform goods and services tax".
Indian economy grew 7.3 per cent in 2014-15.
ADB, however, has cut its growth forecast for developing Asia to 6.1 per cent from the earlier 6.3 per cent in view of subdued economic activity in the US and China.
In the case of India, it said, underlying indicators suggest that India is on track to achieve the ADO 2015 growth forecast of 7.8 per cent in 2015-16.
"A healthy monsoon extending to early July has seen summer crop sowing increase 57.6 per cent over the last year and is expected to boost growth in agriculture. The number of new investment projects announced has continued to increase for the fourth consecutive quarter during the quarter ended June 2015, indicating brighter investment sentiment," it said.
It added that improvements in indirect tax collection in the first quarter of the current fiscal points to some recovery in manufacturing. The index of industrial production rose at an average rate of 3.2 per cent in January-May 2015, double the 1.6 per cent growth in the same period of 2014.
The pace of GDP growth, it said, is expected to accelerate to 8.2 per cent in 2016-17, driven by continued service sector growth and removal of procedural bottlenecks that have hampered investment flow.