Stable Govt Post-Elections To Help India Grow: Crisil
MUMBAI: Rating agency Crisil has said a stable government post-elections is likely to help the country grow at an average of 6.5 percent for the next five years.
"Our base-case forecast of an average GDP growth of 6.5 percent between FY15 and FY19 is premised on a decisive mandate in the upcoming general elections," the rating agency majority-owned by Standard & Poor's said in a report.
The International Monetary Fund has predicted global growth for the calendar years 2014-18 at 4 percent. However, Crisil said it is not the election results which impact the economy, except in improving sentiment, but policies formulated by the new government that will boost growth.
Economic growth eased to 4.6 percent in the first three quarters of FY14 after clocking 9.3 percent in FY12 and the just-concluded financial year may log the lowest growth rate in decades.
Crisil believes a decisive mandate will create an environment for speedy resolution of policy bottlenecks, hasten reforms and crank up investment efficiency.
"An improvement in investment efficiency, which has fallen drastically over the last two years, is expected to kick in with faster project clearances, implementation of stalled infrastructure projects and resumption of mining activities," the rating agency said.
This will support investment growth when both domestic and global demand begins to rebound and improve capacity utilisation, thus laying the foundation for the country's entry into a phase of healthier growth, the report said.
Crisil said achieving an average growth of 6.5 percent over the next five fiscals is not enough for a country with 269 million people living below the poverty line, which needs to provide jobs to its exploding labour force.
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