CHINA READY TO DISCUSS INDIA’S CONCERNS OVER PAK CORRIDOR
BEIJING: China said on Monday it is ready to discuss India’s concerns on the China-pakistan Economic Corridor (CPEC), which New Delhi has opposed because it passes through Pakistan-occupied Kashmir (POK).
The CPEC is a flagship venture of China’s multi-billion dollar connectivity project, the Belt and Road Initiative (BRI).
China’s statement came in response to Indian ambassador Gautam Bambawale’s remarks in an interview with Global Times, a state-run tabloid, that CPEC is a problem that mustn’t be pushed under the carpet.
“China has reiterated its position. As to the differences between China and India, China stands ready to communicate and talk with India to seek a proper solution so that these differences don’t affect our general national interests,” foreign ministry spokesperson Hua Chunying said at a regular news briefing.
“This best serves the interests of the two countries,” she said.
Hua reiterated that the multibillion dollar CPEC is “merely an economic cooperation” project and not aimed at India. The CPEC will connect Kashgar in northwestern China with Gwadar port in Pakistan through a network of roads, railway lines and oil and gas pipelines. NEW DELHI: The economic survey says the worst is over and the Indian economy is poised to rebound to grow in the range of 7-7.5% in 2018-19.
It credits this recovery to structural policy fixes, including the decision to put in place a bankruptcy code to deal with the bad debt problem — which it believes had become a binding constraint on economic growth. According to the survey, demonetisation of high-value currencies, together with the rollout of the Goods and Services Tax (GST), has led to more people being brought under the tax net and the formal economy is much bigger than what it is estimated at.
Optimistic while the survey is, it makes out a case for policy vigilance to deal with downside risks stemming from rising crude oil prices and any setback to the ongoing recovery of the global economy.
“If macro-economic stability is kept under control, the ongoing reforms are stabilised, and the world economy remains buoyant as today, growth could start recovering towards its medium term economic potential of at least 8%,” the survey said.
The survey, authored by a team led by chief economic adviser Arvind Subramanian and presented in Parliament by finance minister Arun Jaitley on the first day of the budget session, cites high-frequency data such as exports, factory output and nonfood credit growth to up the growth estimate for 2017-18 to 6.75% from 6.5% projected by the Central Statistics Office (CSO).
Given real GDP growth of 6% in the first half (April-september) of 2017-18, this implies that growth in the second half (October-march) would rebound to 7.5% in the fourth quarter (January-march).
The statistics department will release the third quarter GDP data on February 28.
Setting the reform agenda for the next fiscal, the survey makes out a case for shrinking unviable public sector banks, privatising Air India, facilitating easier GST compliance and decisively resolving the bankruptcy cases.
Former finance minister P Chidambaram said the survey was depressing but candid.
“The future course of the economy is conditional on many ifs. After listing the unfinished work (and there are many), the survey seems to prepare the grounds for failure by praying that the world economy maintains its growth momentum and oil prices do not persist at current levels. The outlook is therefore uncertain, if not bleak,” he added.
The survey acknowledged the electoral pressures on a government in the final year of its term, and batted for less aggressive fiscal consolidation.
It said setting overly ambitious targets for consolidation — especially in a pre-election year — based on optimistic forecasts that carry a high risk of not being realised will not garner credibility. “Pragmatically steering between these extremes would suggest the following: a modest consolidation that credibly signals a return to the path of gradual but steady fiscal deficit reductions,” it said.
Jaitley has set a fiscal deficit target of 3.2% of GDP for 2017-18 and aims to lower it to 3% in 2018-19. However, less than expected revenue collections, especially after implementation of GST, and higher expenditure could generate fiscal pressures.
The survey foresees higher than expected inflation in the second half of the current fiscal and projects a nominal GDP growth rate of 10.5% against 9.5% estimated by CSO.