HYDERABAD: Aided by rising investments and political certainty, the country economic growth is expected to accelerate to 5.6% in the current fiscal and further to 6.5% in both FY16 and FY17, said Fitch.
It may be noted that India had been registering below 5% growth since two financial years. It grew 4.5% in 2012-13 and 4.7 per cent in 2013-14.
Recently, the Reserve Bank too has projected a 5.5% GDP growth for the current fiscal and 6.3% for 2015-16. “The new government has started rolling out a number of policies, which may improve the efficiency of the bureaucracy and strengthen the investment climate,” Fitch said in its global economic outlook report.
It said India will be the only BRIC nation where growth picks up in 2014 and further accelerates in 2015 owing to an expected improvement in business environment.
In its report, Fitch noted that investments into the country was likely to rise now that political uncertainty has disappeared since the new government came to power in May.
The ratings agency further said the expected pick-up was supported by the 5.7 per cent GDP growth in April-June quarter of current fiscal.
According to Fitch, in the longer run, a credible low inflation environment would benefit growth by improving the investment environment. WPI inflation fell to a 5-year low of 3.74%, while the retail inflation was at 7.8 per cent in August.
It also said lifting GDP growth to higher levels would require large productivity gains through implementation of reforms related to governance, product and labour markets, as well as reduction of infrastructure bottlenecks.