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‘India's 7.5 % growth rate may be exaggerated’

NDA Government has been "slow" to match its rhetoric in economic reforms, says US

Policy Pulse
Publish Date: Jul 6 2016 10:48AM | Updated Date: Jul 6 2016 10:48AM

‘India's 7.5 % growth rate may be exaggerated’

Expressing concern that India's 7.5 per cent growth rate may be "overstated", the US has said the NDA Government has been "slow" to match its rhetoric in economic reforms even though  it appreciated measures taken by it in several areas like bureaucracy and easing FDI restrictions.

 
While praising series of economic reforms, US State Department in a report said, the Modi Government has been slow to propose other economic reforms that would match its rhetoric. 
 
Pointing out that many of the reforms it proposed have struggled to pass through the  Parliament, the report "Investment Climate Statements for 2016" said that this hassled to many investors retreating slightly from their once forward-leaning support of the BJP-led government.
 
Giving example, it said that government failed to muster adequate political support on a land acquisition bill in Parliament--all but ending its chance of passage in the near term--and is still talking  with Opposition parties the details of a Goods and Services Tax Bill.
 
"Ostensibly, India is one of the fastest growing countries in the world, but this depressed investor sentiment suggests the approximately 7.5 per cent growth rate may be overstated," said the report produced by the Bureau of Economic and Business Affairs of the State Department.
 
There are few quick fixes to the structural impediments, poor monitoring environment, tax and policy uncertainty , localisation requirements, infrastructure blocks, restrictions in many services sectors, and massive shortages of electricity that hinder India's economic growth potential, it said.