The World Bank has said that to sustain 7.6 per cent growth in 2016-17, which would accelerate to 7.7 per cent in 2017-18 and 7.8 per cent in 2018-19, India needs to activate 'stalled engines' including agricultural growth and rural demand, trade and private investment, while ensuring demand from urban households and public investments.
It also said that to remain on this path and sustain 7.6 percent growth in 2016-17, the challenge for the Indian economy is to activate the stalled engines, pointing that India’s economy expanded at 7.6% in FY16 from an average of 6.5% during FY13-FY15, even as several growth engines stalled: agriculture faced a second consecutive drought year, rural households were under stress, private investments flat-lined, and exports plummeted. The working engines demand from urban households and public investments propelled the economy to a higher growth path.
World Bank's country director in India Onno Ruhl has said that there are good reasons for confidence in India's near-term prospects, however, a pickup in investments is crucial to sustain economic growth in the longer term. He added that the recently approved bankruptcy code is helpful in this regard, and once it is implemented it will help unleash the productivity that Indian firms need in order to create jobs, and become globally competitive.
He further said that implementation of the goods and services tax, increased participation of women in the labour force, improvement in the business environment and increasing private investment will be some of the key measures India will have to take to reach double-digit growth. While manufacturing, services, urban consumption keep economy on growth path, the Update highlighted the need to strengthen governance and balance sheets of banks. However, he also cautioned that the most significant near and medium-term risks stem from the banking sector and its ability to finance private investment, which continues to face several impediments in the form of excess global capacity, regulatory and policy challenges, in addition to corporate debt overhang.
Start Research-backed Investing ...Now. Subscribe to Sapphire
MoneyWorks4Me is a SEBI-registered Investment Adviser (IA) dedicated to helping investors build long-term wealth through transparent, research-driven, conflict-free guidance. Founded in 2008, we started our journey as a Research Analyst (RA), providing deep fundamental analysis, intrinsic value insights, and long-term investing frameworks for Indian equities. In 2017, we transitioned to a full-fledged SEBI-registered Investment Adviser, strengthening our commitment to acting as a fiduciary—always putting the investor’s interest first.
To become India’s most trusted, research-powered fiduciary advisory platform—where every investor, regardless of experience, can make calm, confident, and well-reasoned investment decisions.
MoneyWorks4Me ensures this through: