Growth prospects positive as reforms gain traction, says report

Growth prospects remain positive for the Indian economy, with the government strongly accelerating its reform announcements, a Dun & Bradstreet report says.

According to the research firm, reform announcements are gaining momentum and growth prospects remain positive despite the fact that the Indian economy is at a crucial juncture amid an investment lull and weak exports.

"The real estate Bill, the new Hydrocarbon Exploration Licensing Policy, the Bill to amend the Companies Act and the proposed introduction of the bankruptcy code bear testimony that the government is well focused on reviving the investment climate and improving ease of doing business scenario in India," Dun & Bradstreet India Senior Economist Arun Singh said.

As per the report, the growth prospects of the Indian economy for 2016-17 would be highly dependent on domestic drivers of growth with very little support seeping in from the global market.

Meanwhile, the domestic economy is at a crucial juncture, with IIP declining for the third month in row in January 2016, reflecting the investment lull in the economy, while exports are mired in a slump amid tepid global demand and a volatile global currency market.

Moreover, corporate and bank balance sheets remain stressed, affecting the prospects for reviving private investment, a key engine for long-term growth.

"In spite of these macro-economic imbalances, growth prospects remain positive with the government strongly augmenting its reform announcements," Singh said.

He added that the Union Budget 2016-17 has set the tone for a modest recovery in investment cycle with its sharp focus on infrastructure investments.

"In addition, numerous measures to alleviate rural distress will be positive for private consumption, going forward," he said.