The United Nations today said India will see a gradual growth acceleration with its GDP expected to reach 5.9 per cent this year and 6.3 per cent in 2016.
According to the United Nations World Economic Situation and Prospects 2015 report, India’s economy expanded by an estimated 5.4 per cent in 2014, an improvement from growth of 5.0 per cent recorded in 2013, but still significantly below the 8.0 per cent pace of the pre-crisis period.
The report said the recovery is partly the result of improved market sentiment after the new administration took office in the second quarter of 2014 and announced plans to reform the bureaucracy, labour laws and public subsidies.
“India’s economy expanded by an estimated 5.4 percent in 2014, an improvement from growth of 5 percent recorded in 2013, but still significantly below the 8 percent pace of the pre-crisis period,” said the United Nations World Economic Situation and Prospects 2015 (WESP) report.
The WESP report is produced at the beginning of each year by the UN Department of Economic and Social Affairs, the UN Conference on Trade and Development (UNCTAD), the five UN regional commissions and the World Tourism Organisation (UNWTO).
Despite a weak start in 2014, India’s manufacturing sector registered employment gains in several sectors such as textiles, metals and information technology, which saw marked increases in employment levels through June 2014, the report said.
In general, the job market situation in South Asian countries appeared to be relatively stable in 2014, the report said. Unemployment rates remained significantly higher for women than for men including in India, Pakistan, Iran and Sri Lanka.
UNCTAD head of macro economic and development policies branch Calcagno said, “Schemes like MGNREGA have generated employment and have been good for the economy. Fiscal space of South Asia could be improved. For instance, only three per cent of the population of India pays income tax. Tax collection could be vastly improved.”