US: India’s 7.5% growth rate may be overstated

WASHINGTON: India’s 7.5 per cent growth rate may be “overstated”, the US has said, underlining that the Narendra Modi government has been “slow” in proposing economic reforms in some areas to match its “rhetoric”.

Appreciating the series of economic reforms, especially streamlining bureaucratic decision making and raising FDI limits in certain sectors, the US State Department in a report, however, said the Modi government has been slow to propose other economic reforms that would match its rhetoric and many of the reforms it did propose have struggled to pass through Parliament.

This has resulted in many investors retreating slightly from their once forward-leaning support of the BJP-led government, said the report “Investment Climate Statements for 2016” released by the Bureau of Economic and Business Affairs on Tuesday.

“For example, the government failed to muster sufficient political support on a land acquisition bill in Parliament — all but ending its chance of passage in the near term — and is still negotiating with opposition parties the details of a Goods and Services Tax Bill, which if not watered down in negotiations, could streamline India’s convoluted tax structure and provide an immediate boost to GDP,” it said.

“Ostensibly, India is one of the fastest growing countries in the world, but this depressed investor sentiment suggests the approximately 7.5 per cent growth rate may be overstated,” the report said.