But everything is not hunky dory, report.

Recent reforms have put India in a position to achieve faster and sustainable growth over the next few years, but policymakers face challenges in handling non-performing loans and reviving private investments.

This is the reading from a report “India Set To Ride Recent Reforms To Higher-Quality Growth”. The opinion article by CRISIL Ltd was published by S&P Global Ratings.

“The quality, although not so much the rate, of economic growth in India is improving,” said Dharmakirti Joshi, Chief Economist of CRISIL Ltd.

“Efficient implementation of the reforms and repairs initiated in the past three years could trigger further gains for the economy,” he believes.

Inflation-targeting is providing an institutional framework to rein in prices.

Fiscal policy has also been mildly growth-focused, even as India gradually reduces its budget deficit.

Such measures have improved the country’s resilience to global shocks and lent stability to the rupee, according to the opinion article.

But not everything is hunky dory, the report warns.

Tackling the non-performing assets, or bad loans, in the banking sector, and reviving private investments continue to challenge policymakers.

“While the GST (Goods and Services Tax) structure is not optimal, it is still a significant improvement over the earlier system of multiple and cascading taxes,” said Joshi.

GST implementation from 1 July 2017 is the biggest reform in the country.

“While full implementation of the GST would result in efficiency gains and lead to higher tax compliance in the longer run, it could lead to disruptions and a likely loss of revenue in the short run,” wrote Joshi.

CRISIL expects India’s GDP growth to rise by 30 basis points to 7.4% in fiscal 2018 (ending March 31), driven by consumption demand.

A normal monsoon (which is progressing well), benign inflation, and softer interest rates would help in this regard. fii-news.com