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India Growth Outpaces China
World Economy

India Growth Outpaces China

India’s economy grew at an average rate of 7.5% in 2015, faster than the 6.9% growth in China, official figures show.
The government said GDP growth in October to December was 7.3%, a slight drop on previous quarters which were revised sharply higher, BBC reported.
Even though the economy lost steam in the last quarter, its pace of expansion was faster than the growth posted by China in the same quarter.
India measures the economy over a fiscal rather than a calendar year.
Prime Minister Narendra Modi’s government said growth for the fiscal year ending March 2016 is forecast to accelerate to 7.6%.
However, some economists say the latest growth figures are at odds with other data for Asia’s third largest economy, including weak exports, railway freight, cement production and investment and flat order books.
Ritika Mankar, an economist at Ambit Capital, said: “The new GDP series and the information it is conveying, not just in terms of level but also in terms of the direction, seems counterintuitive.”
Shubhada Rao, chief economist at Yes Bank in Mumbai, said the figures were “difficult to correlate” with other data, including a contraction in agriculture.
A year ago India’s Statistics Ministry revised GDP growth rates higher—closer to that of China—by updating the base year used for price comparisons.

 Skepticism
It’s fair to say there’s been a lot of skepticism about India’s GDP data since the government revised the way it calculates those numbers in January last year.
All of the economists are of the opinion that they don’t see this rapid pace of growth reflected on the ground. But all of them also say that there’s no dispute India’s economy is expanding, making it a rare bright spot among emerging nations.
But the country is still a difficult place to do business in, and while the government has been working to try to reduce bureaucracy—some laws that could help ease problems are still stuck in parliament. Perhaps when that changes, the world will really begin to see the impact of faster growth.
Economist Jason Hollands, managing director at Tilney Bestinvest, based in Mayfair, London, recently said that he believes investors interested in emerging markets should focus on India, rather than China, as a source of future returns.
Indian economy is expected to record a five-year high growth rate of 7.6% in 2015-16 on improved performance in manufacturing and farm sectors.
According to the central statistics office, the gross domestic product is estimated at 7.3% in October-December quarter of this fiscal. CSO has also revised upwards the GDP growth estimates for April-June and July-September quarters to 7.6% and 7.7% from earlier calculation of 7% and 7.4%, respectively.
Caption
The economy is expected to record a five-year high growth rate.

 

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