Lok Sabha Question No. 1036 (UNSTARRED), answered on 2016-07-22
Subject: Economic Growth
Ministry: FINANCE
Asked by: AJAY (TENI) MISRA

- (a) whether  as  per  various  international  finance  organisations  including various research

centres, India is the fastest growing economy of the world and its Gross Domestic Product is projected to accelerate in the next ten years;

- (b) if so, the grounds on which such projection is made;
- (c) whether not passing the Goods and Services Tax Bill is likely to affect the growing economy;
- (d) if so, the details thereof; and
- (e) the steps likely to be taken by the Government to stabilise and increase the GDP in these adverse circumstances, if so, the details thereof?

## MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI ARJUN RAM MEGHWAL)

(a)  World  Bank's  Report  on  Global  Economic  Prospects,  published  in  June  2016, projected that India's growth will be 7.6 per cent in 2016-17 and will improve to 7.7 per cent in 2017-18. The International Monetary Fund (IMF), in its World Economic Outlook (WEO), published in  July  2016,  has  projected  that  India  will  grow  by  7.4  per  cent  in 2016-17, which would be one of the highest growth among the major world economies. India's growth is projected by the IMF to improve gradually in the coming years.

(b)  The  IMF  has  indicated  that  India's  growth  will  continue  to  be  driven  by  private consumption, which has benefited from lower energy prices and higher real incomes. The Global Economic Prospects of the World Bank also indicated that economic activity in India has remained robust, supported mainly by domestic demand. The World Bank has  also  observed  that  an  accommodative  monetary  stance,  public  investments  in infrastructure,  and  progress  on  structural  reforms,  including  new  bankruptcy  laws, should support a pickup in private investment.

(c) & (d) There is a broad consensus that the Goods and Services Tax is a major reform initiative that will subsume several indirect taxes eliminating their cascading impact, help widen the tax base, integrate the goods and services market and thereby yield higher growth. Hence, the passing of the Goods and Services Tax Bill will pave the way for an improvement in the overall economic outcome.

(e)  The  Government  of  India  has  taken  various  initiatives  to  boost  the  growth  of  the economy  which, inter  alia ,  include;  fillip  to  manufacturing  and  infrastructure  through fiscal incentives and concrete measures for transport, power, and other urban and rural infrastructure;  substantive  reforms  and  liberalization  of  foreign  direct  investment  in major sectors; measures to debottleneck the supply of key raw materials; Skill India and Digital  India  initiatives;  'Make  in  India'  initiative  along  with  the  attendant  facilitatory measures for a more conducive environment for investment;  the new insolvency and bankruptcy  related  legislation;  Start-up  India Initiative  to  boost  entrepreneurship  and creation of jobs; 'Stand Up India Scheme' to promote entrepreneurship among SC/ST

and women entrepreneurs;  boost  to  agricultural  sector  with  focus  on  micro  irrigation, watershed development, soil conservation and credit; and, various measures to improve clarity and transparency in economic policy-making. Undertaking measures to stabilize and  promote  economic  growth  on  a  continued  basis  is  high  on  the  agenda  of  the Government. Its focus on growth-promoting economic reforms and the commitment to improve  the  ease  of  doing  business  and  investment  is  likely  to  combat  the  adverse spillovers from global slowdown.

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