India to post 7.3% growth in 2015: OECD

London, June 3

India’s economic growth is projected to remain “strong and stable” at 7.3% in 2015 on the back of revival in investments even as more reforms are needed to reduce uncertainties over taxation norms, said the Organisation for Economic Cooperation and Development (OECD), a Paris-based think tank, on Wednesday.

Projecting a higher growth rate of 7.4% for 2016, the OECD said a decline in oil prices would reduce pressures on the current account deficit, inflation and subsidies. The think tank’s projection came a day after the Reserve Bank of India flagged concerns about monsoon and inflation that would have an impact on economic growth.

“The growth in India is expected to remain strong and stable in 2015 (at 7.3%) and 2016 (7.4%). The recessions in Russia and Brazil are projected to give way to low but positive growth in 2016,” the OECD said.

Releasing its latest Economic Outlook report, it said that India’s economic growth will remain high, supported by a revival in investment. In November last, the grouping had projected the Indian economy to expand 6.4% and 6.6% in 2015 and 2016, respectively.

However, today’s projection is less than the GDP growth forecast of 7.7% for 2015 and 8% for 2016 made by the OECD in its Interim Economic Assessment report released in March this year.

Meanwhile, India has overtaken China to become the world’s fastest growing economy by clocking 7.5% GDP for the March quarter. In 2014-15, the economy grew 7.3%, as per figures released by the Central Statistics Office last month.

The OECD, which is a grouping of 34 countries, said investment failed to rebound in 2014, reflecting poor infrastructure and delays in administrative procedures.

“To revive corporate investment, further reforms are needed to reduce uncertainties surrounding land acquisition and tax regulations and to improve the quality of electricity and transport systems,” it said.

“The reduction in inflation expectations provides room for monetary easing. Addressing non-performing loans would strengthen the monetary policy transmission,” it noted. — PTI