India's GDP Growth May Surpass China in 2 Years: Kotak Life

India's GDP growth is likely to recover in the next financial year 2015-16 and may surpass China's growth by 2016-17, Hemant Kanawala, head of equity at Kotak Life Insurance, told NDTV.

"The Indian GDP is likely to recover in FY16. We are expecting that growth will recover above 6 per cent next year and by CY16 (Calendar Year 2016) or FY17 India is likely to surpass GDP growth of even China. India is likely to emerge one of the fastest growing economies among the emerging markets," he said.

India's growth has been stuck at sub-5 per cent for the last two fiscals - its worst ever performance in 25 years. While China's economy grew by 7.7 per cent in the last fiscal, India grew at 4.7 per cent.

"The expectation is Chinese growth will come off...for FY17 or CY16, which investors globally see, Indian GDP is likely to be in the range of 7 per cent whereas China is likely to go below that as of now, this is what the current estimates suggest," he said. (Watch Video)

The Reserve Bank of India or RBI sees India's GDP growth at 5.5 per cent in FY15. The World Bank pegs it at 5.6 per cent.

Investors expect FY16 GDP in the range of 6-6.5 per cent, Mr Kanawala said. "But the exact GDP in March 16 is likely to be between 6.5-7 per cent," he added.

The International Monetary Fund or IMF expects China's growth to slow down to 6.5 per cent sometime in 2016, while the World Bank sees China's growth slide to 7.1 per cent in 2016.

Kotak expects the Reserve Bank of India (RBI) to lower interest rates next year, which it believes will propel growth.

"If inflation remains lower, then there will be greater ability of RBI to lower interest rates, which is one of the first requirements for the economy to recover and grow faster," Mr Kanawala said.

Wholesale inflation in October cooled to a 5-year low of 1.77 per cent, helped by fall in food and fuel prices; while retail inflation eased for the third straight month to 5.52 per cent.

Faster clearance of projects which are stalled and reforms on land and labour will be the key to India's growth recovery, Kotak said.