India's 7.5 per cent growth rate may be overstated: US


Washington, Jul 6 (PTI): Uderlining that India's 7.5 per cent growth rate may be "overstated", the US has said the Narendra Modi government has been "slow" to match its rhetoric in economic reforms even as it appreciated measures taken by it in areas like bureaucracy and easing FDI restrictions.

Highly appreciative of the series of economic reforms, in particular streamlining bureaucratic decision making and raising FDI limits in certain sectors, US State Department in a report said yesterday, the Modi government has been slow to propose other economic reforms that would match its rhetoric.

Noting that many of the reforms it did propose have struggled to pass through Parliament, the report "Investment Climate Statements for 2016" said that this has resulted in many investors retreating slightly from their once forward-leaning support of the BJP-led government.

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.

"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,” said the report produced by the Bureau of Economic and Business Affairs of the State Department.

There are few quick fixes to the structural impediments, poor regulatory environment, tax and policy uncertainty, infrastructure bottlenecks, localization requirements, restrictions in many services sectors, and massive shortages of electricity that hinder India's economic growth potential, it said.

Recognizing that the gains from a massive, positive terms-of-trade shock due to lower oil prices that India has benefited from may not be repeated in the current global economic environment, the Finance Ministry has slightly reduced the official growth outlook for next year, it said.

The State Department said the 2014 election marked a turning point in investor sentiment, as a fractured minority government, seemingly unable to advance essential economic reforms, was displaced in favor of a government that had won on a platform of economic growth.

"Additionally, the monetary stewardship of Raghuram Rajan, the respected Governor General of the Reserve Bank of India, further boosted investor sentiment," the report said.
The State Department said despite the challenges, the opportunities are immense for foreign companies operating in India, although many highlight that success requires a long-term planning horizon and a state-by-state strategy to adapt to the complexity and diversity of India's markets.

India's infrastructure needs are estimated at USD1.5-USD2 trillion over the next 5-7 years, offering excellent opportunities for US companies to participate in India's development, provided appropriate mechanisms for financing are developed.

For example, in June last year, PM Modi launched a program to build 100 Smart Cities. Indian conglomerates and high technology companies are generally equal in sophistication and capability to their international counterparts, while certain industrial sectors, such as information technology, telecommunications, and engineering are globally recognized for their innovation and competitiveness, the State Department said.

"India's image as an investment destination was tarnished in 2010 and 2011 by high-profile graft cases in the construction and telecom sectors, exacerbating existing private sector concerns about the government's uneven application of its policies," the report said, adding there is now more clarity on the regulatory front. The State Department said the current government has made some progress in fulfilling its mandate to build a cleaner, more market-oriented, and more competitive India. The government has made changes to some of its policies, including on Foreign Direct Investment, tariffs, and customs procedures, and improving access for the US trade and investment to the Indian market, it said.

"Prime Minister Modi's courtship of multinationals to invest and 'Make in India' has not yet addressed longstanding hesitations over India's lack of effective IPR enforcement," the State Department said in its report.

At the same time, it said the Modi government has been very willing to engage in discussions with the US government and US industry on IPR in 2015. India has made efforts to streamline its IP framework through administrative actions and capacity building, it added.

Despite progress, the Indian economy is still constrained by conflicting rules and a complex bureaucratic system that has broad discretionary powers, the report said.

"India has a decentralized federal system of government in which states possess extensive regulatory powers. Regulatory decisions governing important issues such as zoning, land-use, and the environment vary between states. Opposition from labor unions and political constituencies slows the pace of land acquisition, environmental clearances, and investment policy," it said.

  

Top Stories

Comment on this article

  • Jprakash , Karkala

    Wed, Jul 06 2016

    According to TOI 24-06-2016, in Guja-rat 6.04 crore people nearly 3.51crore are unemployed. This is emerged from 2011census. This is real Guja-rat model of development?!!!!!!

    DisAgree Agree [3] Reply Report Abuse

  • JK , Udupi

    Wed, Jul 06 2016

    I would say Congress is the reason for the Government to slow down in other reforms. They are mainly blocking land act bill for no reason. Congress is the only party which doesn't want Government to make progress in India's growth.

    DisAgree [8] Agree [5] Reply Report Abuse

  • Rion, Udupi

    Wed, Jul 06 2016

    Fake govt. laatfut report. India will continue the same unless political revolution happens in India. Never dream India will grow unless crony capitalists hanged !!!

    DisAgree [1] Agree [9] Reply Report Abuse

  • A. S. Mathew, U.S.A.

    Wed, Jul 06 2016

    The Finance Minister has no idea about the subject called " Gross domestic production" GDP. He will create his own number, add the percentage while changing the pulpit to get foreign direct investment by the trillions of dollars, thinking that the listeners are gullible people like the certain percentage of the electorate of India blindly marching behind these fake rhetoric. While he was speaking at the Columbia University last year, said that the GDP of India will be 10%. The highest increased GDP of China before the recession was over 11.5% but now declined less than 8%. Their massive export market, 20% of the consumer factory made goods for the whole world was the key player of the GDP. The GDPs of the oil producing countries have terribly declined, the richest GCC country Saudi Arabia's will be less than 2%, but the GDP of India is going up. How?

    70% of the GDP of the U.S. is depending upon the consumer confidence and purchasing power which is in trouble for a very long time, thus plunged. How the GDP calculation of India is done is a mystery while the job creation is in terrible trouble, also the export is showing very sad data even though the Re value is way down. The borrowing of the consumers in India has declined these are negative signs of a declining GDP. Based on the GDP sermon of the politicians, it seems like India is another planet, not a nation on the planet called " earth".

    Mr. Modi used to say that the GDP of India will be 5 trillion dollars in five years, now keeping totally quite about the GDP mantra. How an economy of $ 2 trillion caught up in a world-wide recession could more than double in five years?

    Simply wait and watch to read the red letter writing on the wall about the fastest growing Indian economy of the world.

    DisAgree [3] Agree [17] Reply Report Abuse

  • Dev Kumar, Mangalore/New Delhi

    Wed, Jul 06 2016

    Mathewji...Is it possible to short within 200 words. I do not have time to waste for unnecessary things which is of no use.

    DisAgree [17] Agree [4] Reply Report Abuse

  • A. S. Mathew, U.S.A.

    Wed, Jul 06 2016

    Dev Kumarji, your special gift of God for India, Modiji knows that trick of " aachi din" in short sentence. But the subject called
    GDP is a big subject. Those people who are interested to read will read that, you simply listen to Mr. Modi's sermon.

    DisAgree [2] Agree [10] Reply Report Abuse

  • Arun, Mangaluru

    Wed, Jul 06 2016

    @ Dev Kumar, Mangalore/New Delhi

    It is not your cup of tea to understand the international affairs & economics.... just chill... don't waste your time....

    DisAgree [4] Agree [10] Reply Report Abuse

  • A. S. Mathew, U.S.A.

    Wed, Jul 06 2016

    Dev Kumarji, the GDP data being delivered by the BJP Economists and Arun Jaitly is from the learning they have from the BJP University but the rest of the world's GDP calculation is totally different. International institutions like the World Bank will be questioning the BJP University data.

    DisAgree Agree [2] Reply Report Abuse

  • michael noronha, mysuru

    Wed, Jul 06 2016

    Fiery in words failure in action - can best be the evaluation of the present Central Government.

    DisAgree Agree [13] Reply Report Abuse

  • Orton, Mangalore

    Wed, Jul 06 2016

    If you want to know little about Economics, you have to study at least pre university.

    Fake certificates will figure out fake figures only.

    DisAgree Agree [9] Reply Report Abuse

  • Jossey Saldanha, Nashville

    Wed, Jul 06 2016

    You cannot fool all the people all the time.
    No wonder Rajan left ...

    DisAgree [1] Agree [25] Reply Report Abuse

  • Declan, Mumbai

    Wed, Jul 06 2016

    Will they call this 7.5 figure as 'Fake in India' ?

    DisAgree [1] Agree [17] Reply Report Abuse

  • Diwakar, Bangalore

    Wed, Jul 06 2016

    Dr Subramanya Swamy.. can you help Mr PM to calculate the exact growth rate and prevent Team UPA from comments ?

    DisAgree [2] Agree [14] Reply Report Abuse

  • Declan, Mumbai

    Wed, Jul 06 2016

    I think Swamy may be more interested in calculating how much time is left for him before he is expelled from the BJP for all his controversial comments which is probably giving their leader some sleepless nights.

    DisAgree [1] Agree [18] Reply Report Abuse

  • Amin Bhoja, Patte / Riyadh

    Wed, Jul 06 2016

    India is growing and so it's economy.We are not in the era of of 1991 known for the position of super beggar and now we are transformed our self towards a economic superpower and believe me this century is belonging to India... !!!

    DisAgree [17] Agree [6] Reply Report Abuse

  • Declan, Mumbai

    Wed, Jul 06 2016

    Yeah just keep overstating GDP figures at home and overseas and voila ! - become an economic superpower.

    Cabinet berth is waiting for such talent.

    DisAgree [1] Agree [15] Reply Report Abuse

  • Amin Bhoja, Patte / Riyadh

    Wed, Jul 06 2016

    It is 1991 PVN Rao along with Dr Singh who liberalized the Indian economy from mixed economy to capitalism with it's sea changes!!!Forget American calculations let us believe in our counts !!!

    DisAgree [6] Agree [2] Reply Report Abuse

  • Declan, Mumbai

    Wed, Jul 06 2016

    As a patriotic Indian I would love nothing more than to see my beloved nation India 'genuinely' prosper. However, if any government (past or present) fakes or manipulates growth figures to deceive it's own citizens and the rest of the world to give a false perception of good economic growth just with future elections in mind and/or just to attract FDI then that is a despicable thing to do worth strongly condemning.

    DisAgree Agree [9] Report Abuse

  • Joseph F. Gonsalves, Bannur, Puttur / Mangalore

    Wed, Jul 06 2016

    Uncleaned Ganga will be shown Cleaned Ganga.

    During the general elections they shown Shanghai to Ahmadabad.

    Andhoumko Haathi Dhikaaya.

    DisAgree [1] Agree [19] Reply Report Abuse

  • Joseph F. Gonsalves, Bannur, Puttur / Mangalore

    Wed, Jul 06 2016

    The growth rate of India is:

    ======= ONE EYED KING IN THE LAND OF THE BLINDS =========

    DisAgree [1] Agree [19] Reply Report Abuse

  • Declan, Mumbai

    Wed, Jul 06 2016

    7.5 is a fake figure.

    As fake as the 15 lakhs promise

    As fake as the clean chit for 2002.

    As fake as the various allegations on the targetted family.

    DisAgree [4] Agree [27] Reply Report Abuse

  • Peter, Bangalore

    Wed, Jul 06 2016

    Feku exposed.

    DisAgree [4] Agree [28] Reply Report Abuse

  • Dev Kumar, Mangalore/New Delhi

    Wed, Jul 06 2016

    All industrialists are happy after induction of smriti irani in ministry of textiles. Earlier minister of textiles are under ministry of commerce. Ambani of Reliance, Nusli Davar of Mumbai Dying, Banswara Synthetics, Century Rayon, I.C.Gandhi Synthetics, Garden Silks, S.Kasliwala (S.K), Bhoghilal,and many more Kapal Mehra of Orkay..are look forward with positive in new ministry. Hope many changes may occur in coming days..with more export incentives. Already smriti irani proved her mettle in HRD ministry and handed over to other to run. Great going indeed.

    DisAgree [36] Agree [4] Reply Report Abuse

  • Robert, Mangalore

    Wed, Jul 06 2016


    Dear Dev,

    What this explanation has to do with the FAKE and cooked up 7.5 percent growth rate.

    Nonsense and learn to focus on topic !!

    DisAgree [1] Agree [15] Reply Report Abuse

  • alfria, mumbai

    Wed, Jul 06 2016

    All the industrialist came to your residence to thank you and tell you that they are very happy with smriti, Fake master and a fake bhakt

    DisAgree [2] Agree [16] Reply Report Abuse

  • geoffrey , hat hill

    Wed, Jul 06 2016

    Devkumar, it's proving the METTLE and handing over the MANTLE, if you try to combine the two, it becomes a classic example Butler English that that you called sometime back.

    DisAgree [2] Agree [8] Reply Report Abuse

  • RP, Mangaluru

    Wed, Jul 06 2016

    May be handiwork of ghaplesh Kumar...
    Figure is fekuation......
    US knows our asal bhandavala...
    Middle class and poor are targets of these fekuation methods...

    DisAgree [4] Agree [20] Reply Report Abuse

  • John, Udupi

    Wed, Jul 06 2016

    We 70% Indians knew it from the beginning!. And many in the 30% have now started to doubt!. Bhashanas with teleprompter are only good for claps and standing ovation!

    DisAgree [2] Agree [29] Reply Report Abuse

  • The Guru, Mangalore

    Wed, Jul 06 2016

    John, Udupi

    can you name the 70% indian who knew from before?

    DisAgree [20] Agree [3] Reply Report Abuse

  • Vincent Rodrigues., Frazer Town,Bangalore

    Wed, Jul 06 2016

    US might have read Modi rightly and has given fair their comment on Indian growth results when nothing substantial growth feasibility in any sectors in the country is seen.

    DisAgree [2] Agree [21] Reply Report Abuse

  • geoffrey , hat hill

    Wed, Jul 06 2016

    It's as exaggerated as 56".

    DisAgree [6] Agree [32] Reply Report Abuse

  • kiran raj, mangalore

    Wed, Jul 06 2016

    Nothing has changed, Not only US, every Indian knows this, manipulated figures

    DisAgree [4] Agree [34] Reply Report Abuse

  • Dev Kumar, Mangalore/New Delhi

    Wed, Jul 06 2016

    If this opposition parties give chance to run parliament smoothly...many more bills can be implemented. Just wait for monsoon season will approve many more. If these people not give chance for function will throw away without any notice.
    Growth of India is in high speed after change of ministry..and sensex also risen. Hope in textile field export will more after smriti irani will take over.

    DisAgree [35] Agree [10] Reply Report Abuse

  • RonRon, Udupi

    Wed, Jul 06 2016

    Just check facts.... how BJP behaved during UPA government..... who is responsible for loses during bandhs for price rise

    DisAgree [3] Agree [29] Reply Report Abuse

  • Robert, Mangalore

    Wed, Jul 06 2016

    Dear Dev,

    What Susu in Parliament and Jootley in Rajyasabha did for UPA government, and it was ok then now any opposition is not ok.

    Why are you only supporting Textile minister when there are 19 new faces added. Again JUMLA on maximum governance with minimum Government !!!!

    DisAgree [1] Agree [15] Reply Report Abuse


Leave a Comment

Title: India's 7.5 per cent growth rate may be overstated: US



You have 2000 characters left.

Disclaimer:

Please write your correct name and email address. Kindly do not post any personal, abusive, defamatory, infringing, obscene, indecent, discriminatory or unlawful or similar comments. Daijiworld.com will not be responsible for any defamatory message posted under this article.

Please note that sending false messages to insult, defame, intimidate, mislead or deceive people or to intentionally cause public disorder is punishable under law. It is obligatory on Daijiworld to provide the IP address and other details of senders of such comments, to the authority concerned upon request.

Hence, sending offensive comments using daijiworld will be purely at your own risk, and in no way will Daijiworld.com be held responsible.