Indian economy will grow at 8.5 per cent during the current fiscal, according to United Nations Conference on Trade and Development (UNCTAD), an estimate that appears conservative given the 9.3 per cent growth in the first quarter.

The  growth figure has been projected on the base of quick official estimates of 9.2 per cent economic growth in 2006-07. The revised figures put out by Central Statistical Organisation had estimated economic growth at 9.4 per cent for last fiscal. “These are preliminary figures,” Director-General of Research & Information System for Developing Countries Nagesh Kumar said after releasing the Trade & Development Report, 2007.

Lags behind China
However, the estimate is similar to RBI’s projection of 8.5 per cent economic growth in 2007-08. Indian growth story, though quite impressive, lags behind China, which has been witnessing at least 10 per cent growth since 2003. The report projected Chinese economy to grow at 10.5 per cent during the calendar year even on the high base of 10.7 per cent in 2007. It said fastest growing regions of world economy will be east and south Asia, mainly due to the strong performance of India and China. Other countries in east, south and southeast Asia have benefited from the dynamism of India and China through strong export performances, UNCTAD said. High investment ratios in both the countries — over 40 per cent of GDP in China and close to 30 per cent in India — can only persist if large external shocks can be avoided and if economic policy is not forced to limit expansion to a greater extent than currently envisaged, it added.

‘DON’T RUSH WITH FTAS’
New Delhi, PTI: United Nations Conference on Trade and Development has warned developing countries such as India against rushing into bilateral or regional free trade pacts with rich nations, and advised them to retain options of implementing alternative growth plans.

Developing nations have already ceded their space in WTO framework to decide on their integration with global markets. This space is even more reduced by FTAs with developed countries, it said in its report.

It asked developing countries not to look at FTAs only from the angle of potential impact on exports and imports arising from market opening and possible increases in foreign direct investments.

“They (developing countries) should also look at the impact of these agreements on their ability to use alternative policy options and instruments in the pursuit of a longer term development strategy,” it noted.
There are several potential disadvantages on certain issues on which developing countries could not agree in multilateral trade negotiations. Moreover, most FTAs oblige developing countries to undertake much broader and deeper liberalisation of trade goods, the report said. Most bilateral north-south FTAs also reduce options to design development-oriented FDI policies, it added.