Who: India’s GDP
What: Will grow at 7.5 percent in 2015
When: Estimated by UNCTAD on 6 October 2015
Why: Due to falling oil prices & other factors
The United Nations Conference on Trade and Development on 6 October 2015 (UNCTAD) on 6 October 2015 projected that India’s gross domestic product (GDP) is expected to grow at 7.5 per cent in 2015.
It was revealed by the UNCTAD in its Trade and Development Report 2015 entitled Making the international financial architecture work for development.
As per the report, the growth rate for world in 2015 is expected to remain more or less unchanged from last year, at 2.5 per cent.
Highlights of the report with respect to India
• India’s gross domestic product (GDP) is expected to grow at 7.5 per cent in 2015 compared to China’s 6.9 as China rebalances the structure of its demand by concentrating more on exports.
• India’s upward growth will be possible because of lowering oil prices in the international market that will ease pressure on current account deficit.
• India’s export growth (by volume) slowed down from 8.5 per cent in 2013 to 3.2 per cent in 2014.
• Public banks, which account for 62 per cent of Indian bank loans, will find it difficult to meet the Basel III capital requirements between 2015 and 2019.
• India has emerged as an important player in extending development assistance to developing and under developed countries as part of south-south cooperation that takes the form of credit, concessional loans and grants.
• India is one of the few countries where the Public Private Partnership investment is high. Almost 60 per cent of the total private participation in projects recorded in developing countries was in China, Brazil, the Russian Federation, India, Mexico and Turkey.
• It identified potential financial role of south-led multilateral banks including New Development Bank of BRICS and the Asian Infrastructure Investment Bank (AIIB) in both of which India has membership.
The growth projection for India is in line with recent projections of the World Bank (7.5 %), Fitch (7.5 %) and the RBI (7.4 %).
Also, suggestions of the report for greater structural reforms in the global financial architecture including the World Bank and the International Monetary Fund (IMF) are in consistent with India’s argument in favour of reforms in the multilateral institutions.