India’s finance minister Arun Jaitley is bullish on the country’s economic outlook, forecasting growth of 7.2% this year and rising to 7.7% in 2018. This compares against the International Monetary Fund’s (IMF) estimate that the Indian economy grew by 6.6% in 2016.
He also said that massive spending on infrastructure is needed to maintain the rate.
“India has huge unmet infrastructure funding needs,” said Jaitley. “An estimated US$646bn is required in the next five years and 70% of this will be needed in the power, roads and urban infrastructure sectors.”
“The estimated unmet demand for infrastructure investment in emerging market and developing economies (EMDEs) is gargantuan, estimated at above US$ 1 trillion a year by the World Bank.”
The finance minister added that growth in emerging and developing countries is picking up, and that news from the five key BRICS emerging economies (Brazil, Russia, India, China, South Africa) was “encouraging”.
Jaitley was speaking at the second annual meeting of the New Development Bank (NDB) – formerly referred to as the BRICS Development Bank – in New Delhi. Noting the current shifts in global markets, he added that geopolitical tension and protectionism will prove to be challenging for the emerging markets economies.
“I hope that the NDB will emerge as a development bank and help in the funding of emerging economies,” he added. So far India has sought loans totalling US$2bn for various projects from the NDB.
Jaitley has also pursued a more unified tax regime for India, with the goods and services tax (GST) currently scheduled to be rolled-out at the beginning of July 2017.