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India’s 7.5% growth to outpace China’s slowing economy this year: IMF

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IMF

 

Washington: India is set to decisively outpace China in economic growth this year, and emerge not just as the fastest-expanding economy but also as just a handful of countries to show some acceleration, as per the latest report of the International Monetary Fund (IMF).

The fund, in an update released here on Thursday, has projected India’s growth at 7.5 percent this year, against 6.8 percent for China. While the growth outlook on India for 2016 has been retained at 7.5 percent, that for China is pegged 50 basis points lower at 6.3 percent.

“Global growth is projected at 3.3 percent in 2015, marginally lower than in 2014, with a gradual pickup in advanced economies and a slowdown in emerging market and developing economies. In 2016, growth is expected to strengthen to 3.8 percent,” said the IMF update on World Economic Outlook.

“In emerging market economies, the continued growth slowdown reflects several factors, including lower commodity prices and tighter external financial conditions, structural bottlenecks, re-balancing in China, and economic distress related to geopolitical factors,” it said.

But in advanced economies, it said, the growth was projected to increase from 1.8 percent in 2014 to 2.1 percent in 2015 and 2.4 percent in 2016 – which was a more gradual pickup than what was forecast in the April scenario. It also remained positive on the overall outlook.

“A rebound in activity in a number of distressed economies is expected to result in a pickup in growth in 2016,” it said. While the update did not mention India in its commentary, the tables appended with the study gave the growth projections.

This apart, it said further increase in financial market volatility remained an important downside risk. “Term and risk premiums on longer-term bonds are still very low, and there is a possibility of markets reacting strongly to surprises in this context,” it said.

“Such asset price shifts also bear risks of capital flow reversals in emerging market economies.”

On the global economy, the fund did not paint a bright picture. In the first quarter of 2015 — the starting point for the latest update — world growth at 2.2 percent fell 80 basis points short of the forecast made in April 2015.

The shortfall, it said, reflected to an important extent an unexpected output contraction in the US, with attendant spillovers to Canada and Mexico. One-off factors like a harsh winter, closure of port closures and downsizing of expenditure in the oil economy weakened US activity.

“Outside North America, positive and negative surprises were roughly offsetting. Growth in output and domestic demand in emerging market and developing economies broadly weakened, as expected,” the outlook said.

On the oil scenario, the outlook said the prices rebounded more than expected in the April-June quarter of 2015, reflecting higher demand and expectations that oil out growth in the US will slow faster than previously forecast.

It, nevertheless, said the average annual oil price expected for 2015 at $59 a barrel was in line with the assumption in April, with a somewhat smaller increase forecast for 2016 and beyond. This is because the global supply was running well above the 2014 levels and inventories were rising.

Regarding the developments in Greece, the outlook said it had not resulted in any contagion of significance and that timely policy action would be able to manage such risks if they were to materialize.

“Nevertheless, recent increase in sovereign bond yields in some euro area economies reduce upside risks to activity in these economies and some risks of a reemergence of financial stress remain,” it said, adding a further dollar appreciation posed risks for emerging economies.

(IANS)

  • Vrushali Mahajan

    Great to know about India’s progress. This should definitely continue and India should be recognized as a developed nation.

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Three Projects Help India to Stop its Share of Water to Pakistan after Pulwama

The waters of the western rivers - the Indus, Jhelum, and Chenab - averaging around 135 MAF, were allocated to Pakistan.

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Picture Courtesy:-www.economylead.com

The government has envisaged three projects to give intent to its decision to stop its share of water from three eastern rivers of the Indus system – the Beas, Ravi and Sutlej – from going to Pakistan.

The decision was affirmed by Water Resource Minister Nitin Gadkari on Thursday in the wake of Pulwama terror attack though the Union cabinet had approved implementation of one of the key projects – Shahpurkandi dam – in December last year.

The waters of the western rivers – the Indus, Jhelum, and Chenab – averaging around 135 MAF, were allocated to Pakistan except for “specified domestic, non-consumptive and agricultural use permitted to India”, according to a treaty.

India has also been given the right to generate hydroelectricity through run-of-the-river (RoR) projects on the western rivers which, subject to specific criteria for design and operation, is unrestricted.

pakistan, india, water ban
However, about 2 MAF of water annually from Ravi is reported to be still flowing unutilised to Pakistan. VOA

To utilise the waters of the Eastern rivers, India has constructed the Bhakra Dam on Satluj, Pong and Pandoh Dam on Beas and Thein (Ranjitsagar) on Ravi. These storage works, together with other works like Beas-Sutlej Link, Madhopur-Beas Link and Indira Gandhi Nahar Project have helped India utilise nearly the entire share (95 per cent) of the eastern river waters.

However, about 2 MAF of water annually from Ravi is reported to be still flowing unutilised to Pakistan. The other two projects are Ujh multipurpose project and the second Ravi Beas link below Ujh.

Here’s the reality check of the three projects:

Shahpurkandi Project: It aims to utilise the waters coming from powerhouse of Thein dam in order to irrigate 37,000 hectares of land in Jammu and Kashmir and Punjab by generating 206 MW of power.

The project was scheduled to be completed by September 2016. However, following a dispute between the two states, work was suspended in August 2014 but they reached an agreement last September and the construction work has now resumed with the Centre monitoring its progress. The central government had in December last year announced assistance of Rs 485 crore for the project and it would be completed by June 2022.

 

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The decision was affirmed by Water Resource Minister Nitin Gadkari on Thursday in the wake of Pulwama terror attack. VOA

The project will create irrigation potential of 5,000 hectare in Punjab and 32,173 hectare in Jammu and Kashmir.

Officials said that some water of the Ravi is going waste through the Madhopur Headworks downstream to Pakistan and it is required in Punjab and Jammu and Kashmir.

The total balance cost of pending work in ShahpurKandi Dam project is estimated Rs 1,973.53 crore (irrigation component: Rs 564.63 crore, power component Rs1408.90 crore).

The Shahpurkandi Project was initially approved by the Planning Commission in November, 2001. Revised costs were approved, but there was delay in its execution both because of lack of funds with Punjab and inter-state issues with Jammu and Kashmir.

An agreement was finally reached between the two states under the aegis of Water Resources Ministry in September last year.

Ujh multipurpose project: Construction of the Ujh multipurpose project will create a storage of about 781 million cubic metres of water on Ujh, a tributary of Ravi, for irrigation and power generation and provide a total irrigation benefits of 31,380 hectares in Kathua, Hiranagar and Samba districts of Jammu and Kashmir.

The total estimated cost of the project is Rs 5,850 crore and the Central assistance of Rs 4,892.47 crore on works portion of irrigation component as well as the special grant is under consideration. The project is yet to be implemented and it will take about six years for completion.

Second Ravi Beas link below Ujh: The project has been planned to tap excess water flowing down to Pakistan through Ravi by constructing a barrage across it for diverting water through a tunnel link to the Beas basin.

The project is expected to utilise about 0.58 MAF of surplus waters below Ujh dam by diverting the same to the Beas basin.

 

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Officials said that some water of the Ravi is going waste through the Madhopur Headworks downstream to Pakistan and it is required in Punjab and Jammu and Kashmir. Wikimedia

The water distribution treaty between India and Pakistan was brokered by the World Bank in 1960 to use the water available in the Indus system of rivers originating in India.

 

ALSO READ: IOC Cancels Places for 2020 Tokyo Games from India after it Refused Visas to Pakistan

The Indus system comprises Indus, Jhelum, Chenab, Ravi, Beas and Sutlej rivers. The basin is mainly shared by India and Pakistan with a small share for China and Afghanistan.

Under the treaty signed between India and Pakistan in 1960, all the waters of the three eastern rivers, averaging around 33 million acre feet (MAF), were allocated to India for exclusive use.  (IANS)