India on track of achieving projected 5.5% economic growth rate in FY14-15: ADB

In an encouraging development for the country, Asian Development Bank (ADB) highlighted that India was well on track of achieving projected 5.5% economic growth rate in 2014-15 as declining oil prices presented the country with golden opportunity for undertaking many beneficial reforms. Falling global oil prices present a golden opportunity for importers like Indonesia and India to reform their costly fuel subsidy programmes. The Manila-based agency pointed that the target of 5.5% economic growth was well possible after the country registered growth of 5.7% in the first quarter and 5.3% in the second quarter. It emphasized that growth outlook remained steady despite slowed momentum in second half of 2014 and also there were chances of India achieving 6.3% next year, provided Narendra Modi’s government continues with its reform drive. Further, the agency acknowledged the efforts taken by the Indian government to tackle contentious reforms by eliminating diesel subsidies, but at the same time urged them to extend its efforts to reach the forecast of 6.3% GDP growth in FY2015. However, the agency in its report titled ‘Cheap Oil Can Benefit Asia’ lowered the GDP growth projection for Asia pacific region to 6.1% in 2014, from 6.2% earlier, and to 6.2% in 2015, from 6.4% earlier. The ADB also slashed its 2014 and 2015 growth forecasts for China to 7.4% and 7.2%, respectively, from the 7.5% and 7.4% estimates made in September, due to falling property prices and the spillover effects on the construction sector.