India's youth key to growth: DBS

SINGAPORE: India's young population will be an advantage for its economic growth as the country's GDP is likely to improve at 7.9 per cent for the year 2017-18, according to a major Singapore-based bank .

"India, Indonesia and Philippines have growth potential supported by young population," DBS chief economist David Carbon told the bank's Asian Insights Conference 2016.

With India's working age population on the rise, the key differentiator vis a vis other Asian economies will be productivity gains.

"India's growth is currently below potential, "Carbon had said in recent observation of the Indian economy.

"India's GDP is seen improving to 7.9 per cent in 2017-18 from 7.8 per cent in the current year, said the bank's vice president and economist Radhika Rao.

"We see Indian GDP at 7.9 per cent in the next fiscal year," Rao said.

Meanwhile, Rao sees The Goods and Services Tax ( GST) implementation boosting economic growth to above 8 per cent by 2019-20, having negative implication in the short term soon after implementation.

With the wide ranging reforms on going, GST approval adds to the government plans to enhance the ease of doing business, Rao said.

The GST Constitutional Amendment Bill was cleared by the Rajya Sabha yesterday and is likely to be approved by the Lok Sabha this week after incorporating changes made by the Upper House.

GST, which is expected to be implemented from April 1, 2017, will subsume excise, service tax and other local levies including VAT, octroi.