Quality of growth improving, but jobs hold the key: Crisil

MUMBAI: Quality of the country's growth is improving with focus shifting from boosting cyclical growth through fiscal and monetary stimuli to "repairing the system and initiating structural reforms", rating agency Crisil said.

"The biggest positive is that the policy focus hasn't been based on populism, or on boosting cyclical growth through fiscal and monetary stimuli, but on improving the 'trend' growth by repairing the system and initiating structural reforms wherever possible," it said in a report.

The report also noted that unlike China, the current growth in India is not supported by rampant credit creation.

"Credit growth has averaged 9.8 per cent in the last two years, almost in lockstep with 10.2 per cent nominal GDP growth, underscoring sustainability," it said.

According to Crisil, structurally positive steps have been taken such as mending the electricity and banking sectors, but they remain "work in progress".

"The focus on quality of growth with reform initiatives means there will not be significant upsides immediately," Crisil Chief Economist Dharmakirti Joshi said.

"But if relentlessly implemented, they will do more to raise the trend growth rather than cyclical growth that we are seeing now. We believe this will remain a work in progress for some more time and the momentum needs to continue," he said.