India beats China as world's fastest growing economy in 2015

New Delhi: Hailed as "the bright spot" in a gloomier global economy, India outpaced China as the world's fastest growing economy in 2015 and is expected to clock 7-7.5 percent growth in the New Year provided the reform momentum continues and the business environment improves.

Finance Minister Arun Jaitley says that subdued global economy and moderate private sector investment will continue to pose challenges, while his top priorities for the New Year include rolling out the long-delayed GST, rationalising direct taxes, ensuring further ease of doing business and putting more money for social and physical infrastructure.

While the need for further remains continue to be underlined by the experts as well as the policymakers as a key requirement for India to maintain its growth momentum, World Bank's Chief Economist Kaushik Basu is confident that India can continue to top the charts with fastest growth among all major economies.

Expecting India to grow at 7-7.5 percent in 2016, Basu said, "India will still be the leader among major economies. Not only in 2015 but we expect India to lead that chart in 2016 as well." It will still remain off the targeted growth rate of 8-10 percent in the foreseeable future unless the reforms momentum shifts to a much faster gear.

Going forward, Jaitley will have a tough time in sticking to the fiscal roadmap (3.5 percent of GDP in 2016-17) while taking care of additional outgo towards seventh Pay Commission award and One Rank One Pension (OROP) for retired defence personnel.

For the current financial year ending in March, the latest estimates peg the GDP growth rate at 7 to 7.5 per cent, which will be significantly lower than 8.1 to 8.5 per cent predicted by the government in February 2015.

Although the year began with lot of promise, growth rate could not pick up as much as expected, mainly because of faltering global economy, decline in exports, deficient rains, and inability of the government to push big-ticket reforms like Goods and Services Tax (GST) and land acquisition law.

India's economic growth still accelerated to 7.4 percent in the July-September quarter, overtaking China as the world's fastest growing major economy, on pick up in manufacturing, mining and services sectors. Multilateral lending agency IMF termed India as a 'bright spot' in otherwise slowing global economy.