India to keep up as fastest growing G20 economy for next few years: Moody’s

New Delhi, May 24 (KNN) India will remain as the fastest growing G20 economy for next few years owing to its youth workforce, increasing urbanisation, and rising government spending on infrastructure, said Moody's on Tuesday.

The American credit rating agency gave a thumbs up to India's growth story, estimating that India's Gross Domestic Product already crossed the USD 3.5 trillion-mark in 2022.

Raising several red flags for the country’s economy, Moody’s said bureaucracy could slow approval processes to set up businesses, which would hamper economic growth.

Moody's said that a slacking bureaucracy may drive away foreign investors to other Asian destinations like Indonesia and Vietnam.

“India's higher bureaucracy in decision-making will reduce its attractiveness as a destination for foreign direct investment, especially when competing with other developing economies in the region,” Moody's Investors Service said.

The credit rating agency added that limited liberalisation in business regulations could harm India's growth prospects too.

“Lack of certainty around the amount of time needed for land acquisition approvals, regulatory clearances, obtaining licenses and setting up businesses can materially prolong project gestation,” the credit rating agency said. 

However it also recognised the reforms initiated the Indian government like making labour laws flexible, raising the agricultural sector's efficiency, expanding investment in infrastructure, incentivising investment in manufacturing and strengthening of the financial sector.  (KNN Bureau)