WORLD NEWS: BUSINESS - INDIA EXPECTED TO BECOME FASTEST GROWING ECONOMY OF THE WORLD

India is forecast to become the fastest growing large economy in the world, surpassing that of China.

Figures to be released by the Central Statistics Office are expected to confirm the country grew by 7.3 % from October to December, while China grew 6.8% in the same period.

If confirmed, the figures will be good news for Prime Minister Narendra Modi who swept to power in 2014 on the single agenda of development.
The figures are good for PM Modi who has tried to kickstart India's economy

Since then he has tried to kickstart India's flagging economy through a slew of reforms in the road, railways and coal industries, but what is missing are big-ticket reforms in the national taxation system, land and labour amendments.

Failure of Delhi to resolve tax issues on multinational companies like Vodafone, Cairn Energy, Microsoft and Shell by previous governments is seen as an inability to deal with contentious issues.

Investors remain sceptical over the tardy pace of reforms and the red tape that has a strong hold over every sphere of government.

The country's political opposition has not made it easy for the Prime Minister, blocking all legislation in the upper house of parliament where they have a majority.

Speaking to Sky News on the issue of land reforms, Dr Ajoy Kumar, spokesperson of the Congress Party said: "We will continue to oppose the government and shall take our fight to every nook and corner of this country.

"We will protect the common man's interest against Mr Modi's government which only supports the rich and a few industrialists."

However, some observers doubt the accuracy of the figures which have been calculated using a new method including added value from good including rural motorbike sales and rail freight. It has been endorsed by the Reserve Bank of India.

Analysts believe there is a disconnect between the revised and the general economic indicators of growth.

In the last few months consumer food prices have increased due to droughts. Businesses and farmers face an earnings crunch, industry output has contracted, exports have fallen, and the capital goods sector has shown negative growth.

Corporations are burdened with debt and banks refuse to lend as bad loans have accumulated.

A record fall in crude oil prices has boosted the economy as almost 70% of India's imports are fuel. The country is the third largest importer of crude oil behind America and China.

In the 2016 report of the World Bank for Doing Business - India is ranked a low 130 out of 189 countries. The Prime Minster's target is to be amongst the first 50 three years from now.

But for that his government would need to implement many more reforms and, crucially, at a much faster pace if it wants to make India a destination for global investors.


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