The report stated that India's structural reforms agenda had maintained strong momentum and the passage of GST should propel growth higher. Photograph: (AFP)
The S&P Global Ratings agency said the passage of the indirect tax law gives additional conviction to India's growth projections
Global Ratings agency S&P today said India's new Goods and Services Tax bill will provide impetus to the country's target of 8 per cent growth in the next few years.
S&P termed GST the most important structural reform till date by the Narendra Modi-led government, saying it will only improve efficiency, cross-state trade and tax buoyancy in the economy.
In its report titled "Asia-Pacific steadies while China goes silent", the agency said, "India's GST passage gives us additional conviction around our 8%-ish GDP growth forecast over the next few years."
Indian central bank, Reserve Bank of India, too gave a positive growth outlook for the near future. The country's growth projections seem brighter than last fiscal's and the economy is likely to expand at 7.6 per cent in 2016-17, it said.
However, S&P said inflation remained a risk in the Reserve Bank's target basket. The latest gross domestic production (GDP) figures showed that India's growth slowed to 7.1 per cent in the April-June quarter, from 7.9 per cent in January-March.
In comparison, S&P said China has been nudged up as it raised the GDP growth forecast by about a quarter percentage point in 2016 and 2017 to 6.6 per cent and 6.4 per cent, respectively, and has kept its 2018 forecast roughly unchanged at 6.1 per cent.
It saw a reasonably firm pick-up in Asia-Pacific's macro momentum indicators, with pick-up in retail sales offering the clearest sign in most of the region's economies. This, it said, stems from rising income with consumption playing a larger role.
(WION with inputs from PTI)