NEW DELHI–India’s economic growth is expected to accelerate this year and could reach nearly six percent, a key government study said Wednesday ahead of the first national budget by the new right-wing government.
The India Economic Survey, prepared by the finance ministry, predicted growth would be in the 5.4-5.9 percent range in the financial year to March 31, 2015, up from 4.7 percent in the previous 12 months. “The economy can look forward to better growth prospects in 2014-15 and beyond,” said the report released on the eve of the budget from Prime Minister Narendra Modi’s government which came to power in a landslide election victory in May. The consensus forecast by private economists for growth of Asia’s third-largest economy stands at around 5.5 percent. But a weak monsoon could mean growth would come in at the lower end of the range, the report cautioned. The survey forecast stubbornly high inflation would also moderate by the end of 2014, which could enable the central bank to reduce steep interest rates to kickstart growth. But the report said massive subsidies used to fund public welfare programs posed a risk to efforts to improve the health of public finances.