New Delhi: Revising India's GDP growth forecast upwards by 0.3 per cent to 6.3 per cent in 2015, Asian Development Bank (ADB) has said the economy shows a new promise of turnaround after the election brought a stable government in May.
"India shows new promise of a turnaround. After winning a decisive Parliamentary election victory, the new government (led by Narendra Modi) is better positioned than the old to pursue the reform necessary to unlock the economy's growth potential."
"This Update maintains the 5.5 per cent growth forecast for 2014 but upgrades....to 6.3 per cent, the forecast for 2015, when reform can begin to bear fruit," the multilateral funding agency said in its Outlook 2014 Update released on Thursday.
The reform to stimulate investment, the timely award of environmental clearances, and measures to control inflation are expected to augment firming export demand from the major industrial economies, to boost economic growth, it said.
The new single-party government in India with the strongest mandate in three decades has outlined wide-ranging reforms, which will gradually overcome the difficult structural problems that have beset the economy and caused two years of slow growth and stagnant investment, it added.
"Public expectation of strong economic policy from the government is seen in record highs on the stock market and robust capital inflows."
Improving prospects in India will buoy the 2015 regional growth outlook somewhat, even as the growth path of China moderates, it added.
A greater momentum is expected in 2015 with South Asian growth now forecast at 6.1 per cent, revised up from 5.8 per cent, it said.