An amazing aspect of the recent re-acceleration in India’s economic growth is that it has occurred despite several significant headwinds — a monumental transition to the goods and services tax (GST), massive overcapitalisation of several industries half a decade ago, and a crippled banking sector with rising non-performing assets (NPAs) for the majority of scheduled commercial banks, especially public sector banks (PSBs).
These headwinds are transitory in nature. Closer analysis will reveal that the prospects for accelerating and sustained growth are actually much brighter than broader sentiment suggests.
As GST-related issues continue to get streamlined, there will be an additional boost to the economy from reduced friction, materially higher revenue for GoI, with more streamlined collection from a substantially larger base. GoI will also have an additional data-driven tool with unprecedented visibility for guiding its policies and driving the economy forward. Read More