- India’s negative output gap is showing little signs of closing in 2015.
- Though the economy has been in a cyclical upswing since late 2014, it has failed to gain broader momentum, global rating firm.
- Key reforms such as the land acquisition bill, flexible labour laws, and the goods and services tax have failed to pass parliament.
- The land acquisition bill is a catalyst to investment.
- Foreign firms are wary of investing in India, as lengthy delays in acquiring land tend to stall projects.
- The rating agency is of the view that GDP growth is not likely to rise above 7.5% if the government continues to over promise and not deliver.
- India’s true potential of GDP growth rate lies somewhere near 10%.
- In particular, there are signs that not all is well for manufacturing, the key industry touted by the BJP to drive India’s growth engine.