News:The Organisation for Economic Co-operation and Development(OECD) has released its Economic Survey of India report.
Report on GDP growth:
- The report has projected GDP growth in the current fiscal (2019-20) at 5.8% lower than 6.8 per cent in 2018-19.
- However, it estimated the GDP to grow at 6.2% during 2020-21 and further to 6.4% during 2021-22.
Key Highlights from the report:
- Income has increased fast in recent years but private investment has lagged behind.However,the private investment would bounce back as capacity utilisation rises.
- The recent loosening in monetary policy, combined with fiscal rectitude, will lower the cost of borrowing for the corporate sector.
- The ongoing resolution of distressed assets of non-financial corporates under the Insolvency and Bankruptcy Code is expected to unlock resources for new investment projects.
- Reforms to improve the ease of doing business including recent measures to liberalise FDI and efforts to improve judicial services and contract enforcement will also help.
- Exports will suffer only marginally from the withdrawal of US preferential duties for low-income countries as the products concerned account for a small share of India’s export basket.
Concerns Highlighted by the report:
- Economic growth has been strong but social and governance challenges remain.
- The public debt-to-GDP ratio remains relatively high
- Ambitious reforms have been passed but implementing them fully would boost incomes and wellbeing.
- Addressing domestic structural bottlenecks is key to supporting India’s competitiveness
- Air pollution is high and will increase in the absence of bold action.
- international oil prices have come down but they remain volatile and pose risks for inflation,the current account and public finances.
- The Organisation for Economic Co-operation and Development(OECD) is an intergovernmental economic organisation with 36 member countries
- It was founded in 1961 to stimulate economic progress and world trade.It is headquartered in Paris,France.
- It works to build better policies for better lives.Its goal is also to shape policies that foster prosperity, equality, opportunity and well-being for all.
- India is not a member of OECD but has been a key economic partner.