Global Ratings agency S&P in its latest report titled 'Asia-Pacific steadies while China goes silent' has said that India’s Goods and Services Tax (GST) passage gives more weight to the country's target of 8 per cent economic growth projection in the next few years.
The rating agency had recently said that India will clock a “steroid-free” growth of 8 per cent in coming years, adding that the GST passage is arguably the most important structural reform to date by the Modi government and will improve efficiency, cross-state trade and tax buoyancy.
S&P had stated in its ‘APAC Economic Snapshots - September 2016’ report, that India’s structural reforms agenda had maintained strong momentum and, most recently with the GST passage, should propel growth higher. It added that for India, they are still forecasting GDP growth at about 8 per cent over the next few years. Moreover, this is relatively high quality, steroid-free growth backed by a broadening consumption base.
Reserve Bank of India, too gave a positive growth outlook for the near future and said the country's growth projections seem brighter than last fiscal's and the economy is likely to expand at 7.6 per cent in 2016-17. However, Inflation remains a risk, given the large weights on food, fuel, and other volatile items in the Reserve Bank of India’s target basket. In comparison, S&P has said that China has been nudged up as it raised the GDP growth forecast by about a quarter percentage point in 2016 and 2017 to 6.6 per cent and 6.4 per cent, respectively, and has kept its 2018 forecast roughly unchanged at 6.1 per cent.