Global headwinds will pull down India’s growth rate to 7.4 percent in the next fiscal from 7.6 percent this year but more reforms will help the country remain one of the fastest growing economies in the world, the Asian Development Bank said.

• The Asian Development Bank’s (ADB) growth forecast of 7.4 percent for 2016-17 is substantially lower than its earlier projection of 7.8 percent.
• ADB’s flagship publication Asian Development Outlook (ADO) also projected rise in consumer inflation, mainly on account of the impact of salary hike of government employees and a likely mild pick up in global oil prices.
• ADB projects India’s gross domestic product (GDP) to grow 7.4 percent in FY 2016, slightly below the FY 2015 estimate of 7.6 percent.
• As per India’s Finance Ministry’s estimates, growth is likely to be between 7-7.75 percent next fiscal year.
• The potential growth of the country can be raised further if it can successfully implement necessary reforms including unifying the tax regime, improving labour market regulations as opening further to foreign direct investment and trade.
• It said public investment would remain strong next fiscal and strong PSU banks will help bring in an uptick in bank credit and boost private spending in 2017-18 fiscal.
• The Manila-based multilateral bank forecast annual growth in China of 6.5% this year and 6.3% for 2017. China, the world’s second-largest economy, continues to battle excess capacity and needs to move ahead with structural reform, the bank said.