Domestic rather than global obstacles limit India’s growth: S&P

SINGAPORE- Domestic factors are a bigger constraint to India's shift to a faster growth trajectory than are global factors, according to an opinion report by CRISIL Ltd, the Mumbai-based subsidiary of Standard & Poor's.

"Efforts to contain the high fiscal deficit and inflation limit (the Government’s) ability to generously use counter-cyclical policy tools to boost the economy," says CRISIL's chief economist Dharmakirti Joshi.

"Weak demand, low capacity utilization, and high leverage are impediments to reviving the private corporate investment cycle."

The report notes that global developments since 2014 have had a mixed impact on India. While lower crude oil and commodity prices have helped rein in fiscal and current-account deficits and inflation, slack global growth has hurt India's exports.

Reforms aimed at enhancing financial sector access to the unserved and underserved, improving transparency in Government decision-making, and making it easier to do business will play an important role in pushing growth up over the next two to three years, the report says.

The transition to a sustainable high growth path over the next decade will also require additional reforms, such as a goods and services tax, along with land and labour reforms. www.standardandpoors.com (ATI).