The Indian economy is expected to grow 7.3% in 2019 and 7.5% in 2020, a G20 surveillance note has said. Prepared by the International Monetary Fund (IMF) staff, the note comes ahead of the G20 finance minister and central bank governors' meetings on June 8-9. However, it doesn't necessarily reflect the position and views of the IMF executive Board.
The paper said that the "recent manufacturing indicators point to a tentative rebound in the emerging Asian and Latin American nations except India."
"Global growth is projected to remain stable at around 3.6 percent but will rely on weights shifting toward countries with relatively higher growth rates, mainly G-20 emerging markets such as China and India," the note added.
It also underlined that a number of both advanced and emerging G20 economies including India "are facing more binding constraints on fiscal space, often against a backdrop of high public debt and, in some cases, sizable risk premia."
However, the note added that "the reforms to hiring and dismissal regulations would help incentivise formal job creation in India and, if combined with an increase in female labor force participation would help absorb the country's large demographic dividend. In commodity exporters, economic diversification remains essential for sustained strong growth."
Meanwhile, the April 2019 World Economic Outlook (WEO) survey published by the IMF revised down the global growth forecast to 3.3% in 2019 from 3.6% in 2018. The estimates also revealed that the Indian economy is projected to grow at 7.3% in 2019 and 7.5% in 2020, supported by the continued recovery of investment and robust consumption, thus remaining the fastest growing major economy of the world.
The official data released by the government last week showed that the India's GDP tanked to 5.8% in January-March quarter of FY 2018-19. This dragged the overall growth to a five-year low of 6.8% in FY 2018-19, throwing up a tough challenge for the Modi government 2.0.
"GDP at Constant (2011-12) Prices in Q4 of 2018-19 is estimated at Rs 37.20 lakh crore, as against Rs 35.15 lakh crore in Q4 of 2017-18, showing a growth rate of 5.8 percent," the government said in a statement.