Hailing the several initiatives taken by the new government, the latest edition of the OECD’s economic outlook report on India has said that economic growth is projected to remain strong and India will remain the fastest growing G20 economy. It said that the acceleration of structural reforms in the Indian economy, with the efforts made by Prime Minister Narendra Modi led BJP government in the centre, is bringing a new growth impetus, which has won the confidence of the people by increasing public wages and pensions that will support consumption.
The Organisation for Economic Co-operation and Development (OECD) in its June 2017 report said that, “The increase in public wages and pensions will support consumption. Private investment will recover gradually as excess capacity diminishes, and the landmark Goods and Services Tax and other measures to improve the ease of doing business are being implemented.” According to report, the newly implemented Goods and Services Tax (GST) has framed India into a single tax market and thus will spur productivity, investment, competitiveness, job creation and incomes.
The report also noted that the costs of the withdrawal of high denomination notes - demonetisation - in November 2016 are wearing off, and sales of cars and two-wheelers have bounced back. It also said, exports have picked up, driven by strong demand from Asia and the euro area. Higher oil prices and gold imports, coupled with a decline in remittances inflows, are reflected in some deterioration in the current account deficit.
