WASHINGTON (Diya TV) — India’s proclaimed gross domestic product growth of 7.5 percent is slightly adrift of the actual number, but the country’s growth path is on the right track, according to the U.S. State Department.
In a review of the State Department’s findings, Forbes reports that the Indian economy and other matters are trending in a positive direction, however, the publication believes the growth could be much more positive and rapid than the State Department’s findings. Reforms proposed and undertaken since Prime Minister Modi has assumed his present role have helped, but further implementation is necessary, Forbes reported.
Underlining that India’s 7.5 percent growth might be “overstated,” the U.S. has said that Modi’s administration have been “slow” to match its rhetoric in economic reforms. This despite the fact the U.S. appreciate measures taken by the Modi government to ease FDI restrictions and combat the bureaucracy which India have been notoriously known for.
The report said that the Indian economy was restricted because of conflicting rules and the aforementioned complex bureaucratic system.
“India has a decentralized federal system of government in which states possess extensive regulatory powers. Regulatory decisions governing important issues such as zoning, land-use, and the environment vary between states. Opposition from labor unions and political constituencies slows the pace of land acquisition, environmental clearances, and investment policy,” it said.
“The Modi government has prioritized economic growth to fulfill its electoral promises and to address the Indian electorate’s high expectations. Initially, the government focused on streamlining bureaucratic decision making and raising FDI limits in certain sectors—including defense and railway infrastructure. Modi also called for foreign and domestic companies to support his signature initiative, “Make in India”—a branded campaign to attract international capital to the country’s struggling manufacturing sector. He also set a goal for India to rise rapidly in the World Bank’s Ease of Doing Business rankings. The government has continued to relax FDI restrictions in a wide variety of sectors as part of the government’s efforts to further open the economy. Most recently, the government approved up to 100 percent foreign investment in civil aviation, defense, certain sectors of e-commerce, and the pharmaceutical sector. Additionally, the government eased requirements for some retailers to source “state-of-art” technology in India could be particularly beneficial to high-tech companies such as Apple, although underlying supply chain constraints remain,” it added.
You can read the State Department’s full report here.