New Delhi: India is all set to overtake China's growth rate by clocking 7.8 per cent GDP in 2015-16 and 8.2 per cent during the following fiscal on the back of structural reforms and government's "pro-investment" attitude, Asian Development Bank said on Tuesday.
"India is expected to grow faster than China in the next few years," ADB Chief Economist Shang-Jin Wei said while releasing the bank's annual publication Asian Development Outlook, 2015.
Indian government's pro-investment attitude, improvement in the fiscal as well as current account deficit situation, and some forward movement on resolving structural bottlenecks have helped improve the business climate, making India attractive again to both domestic and foreign investors, he added.
ADB expects India's growth to accelerate to 7.8 per cent in 2015-16 and further to 8.2 per cent in 2016-17. In case of China, the GDP is expected to decelerate to 7.2 per cent in 2015 and 7 per cent a year after.
In the current fiscal, both the economies are expected to clock a 7.4 per cent growth rate. The Indian government however, expects the growth rate to accelerate from 7.4 per cent to 8-8.5 per cent in 2015-16. The International Monetary Fund (IMF) has projected a growth rate of 7.5 per cent for next fiscal.
India, the ADB report said, would drive the economic growth of Emerging Asian economies, as Asia's largest economy China will continue its moderate deceleration in 2015 and 2016 as the government proceeds with its structural reform agenda and fixed asset investment slows.
Shang, however, cautioned that although India's economic prospects look promising, "there are still many challenges".
As regards inflation, the ADB said inflation in 2015-16 at 5 per cent, but may rise to 5.5 per cent in 2016-17. "We expect little bit monetary easing (of interest rates by the RBI). A benign inflation outlook would serve to help monetary policy support growth," ADB Senior Economics Officer, Abhijit Sen Gupta said.
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