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According to the United Nations World Economic Situation and Prospects (WESP) 2017 report, India’s economy is projected to grow by 7.7% in fiscal 2017 and 7.6% in 2018
India will remain the fastest growing large developing economy due to its strong private consumption and gradual introduction of significant domestic reforms.
The UN flagship report has not mention of the withdrawal of the high-denomination Rs. 500 and Rs. 1,000 currency notes nor its impact on the country’s economic growth.
Key Highlights from Report
- India has positioned itself as the most dynamic emerging economy among the largest countries and is expected to remain the fastest growing.
- However, incase of India, low capacity utilisation and stressed balance sheets of banks and businesses will prevent a strong investment revival in the short term.
- China’s growth is projected to remain stable at 6.5% for fiscal years 2017 and 2018 due to domestic demand and accommodative fiscal measures, including off-budget fiscal support through policy banks and public-private partnerships.
- Implications of China’s ongoing economic rebalancing will inevitably be felt by the region in medium and long-run through trade (including commodity prices) and financial channels.
Earlier, International Monetary Fund (IMF) had cut India’s growth rate for FY2017 to 6.6% from its previous estimate of 7.6% due to the “temporary negative consumption shock” of demonetisation. The World Bank also too decelerated India’s GDP growth for 2016-17 fiscal to 7% from its previous estimate of 7.6% citing the impact of demonetisation.
Two economists Oliver Hart and Bengt Holmstrom have won the 2016 Nobel Memorial Prize in Economic Sciences. Both of them will share 8 million kronor, or about $930,000.
Royal Swedish Academy of Sciences has selected them for their contributions to contract theory which tells how contracts help people deal with conflicting interests.
Their individual theories on contract theory are valuable to the understanding of real-life contracts and institutions, as well as potential pitfalls in contract design. For example, contract theory can be used to analyze performance-based pay for CEOs or deductibles and co-pays for insurance.
Their work provided economists microecomic tools to understand interactions between entities, such as design of performance incentives in firms, corporate governance, privatisation, constitutional law and entrepreneur-investor relationships.
Oliver Hart: He was born in 1948 in London, UK. He holds Ph.D. from Princeton University, US. Presently, he is Andrew E. Furer Professor of Economics at Harvard University, US.
Bengt Holmström: He was born in 1949 in Helsinki, Finland. He holds Ph.D. from Stanford University, US. Presently he is Paul A. Samuelson Professor of Economics and Professor of Economics and Management at Massachusetts Institute of Technology (MIT), US.
About Nobel Memorial Prize in Economic Sciences
In 1968, Sweden’s central bank had added the economic sciences prize as a memorial to Nobel. Thus, economics award is not a Nobel Prize as the others prizes which were established by Swedish industrialist Alfred Nobel in 1895.