The United Nations’ Economic and Social Survey of Asia and the Pacific (ESCAP) has projected a recovery of sorts in India’s growth to 6.4 per cent in 2013-14 from the previous year’s low of 5 per cent, even as China’s growth trajectory is estimated to post a moderate increase from 7.8 per cent in 2012 to 8 per cent.
The mild optimism in growth outlook, expressed in ESCAP’s 2013 Survey, stems from the expected improvement in global demand arising from steady growth in the United States and the limited rebound in major emerging economies which is projected to help raise the developing Asia-Pacific region’s growth to 6 per cent in 2013 from 5.6 per cent last year.
Highlighting the key findings of the survey launched here at an event organised by the U.N. Information Centre, ESCAP Chief Economist Nagesh Kumar said the Indian economy seems to have turned the corner from the low growth of 5 per cent in 2012. Also, besides the slight rebound in the advanced economies, India, in its upward growth path, would be helped by moderation of inflation which would create space for easing of interest rates by the Reserve Bank of India (RBI) which, in turn, would help in pick-up of investments.
Dr. Kumar noted that softening of oil and commodity prices in global markets would also help the Indian economy, given the country’s high dependence on imports and this would assist in moderating the current account deficit (CAD).
Long-term structural issues, such as rising inequality, energy and infrastructure shortages in India and the Asia-Pacific region, the survey said, are compounding the slowdown and, therefore, the “structural solution to invigorating the domestic drivers of growth…will lie in making the development process more inclusive and sustainable”.
‘Resist new normal’
In his address at the survey launch, Prime Minister’s Economic Advisory Council Chairman C. Rangarajan asked policy-makers in the ESCAP region to resist meekly accepting the “new normal” and to push for higher growth rates which could lead to an accelerated pace for achieving the Millennium Development Goals.
In particular, the survey highlighted India’s national rural employment guarantee programme (NREGA) that has benefited 48 million households in over 600 districts in 2012-13. It has helped not only in poverty reduction but also in strengthening rural growth, economic resource base and social protection.
In this regard, with the Asia-Pacific region being home to nearly two-third of the world’s poor and having more than a billion people with insecure livelihoods, the survey goes on to highlight the economic benefits of social protection. It makes a first-time estimation of the public investment requirement of a package of social protection and sustainable development policies.