Structural reforms must for 8% growth: S&P

S&P said GST is the next item on the "to do" list as the government pushes for structural reforms

Structural reforms remain key to ensuring a steady eight per cent growth in the medium term for the Indian economy, Standard and Poor’s Global Ratings said on Wednesday, even as it saw India remaining largely insulated from ups and downs of the Chinese economy.

Appreciating the passage of the bankruptcy law by Parliament, S&P said GST is the next item on the “to do” list as the government pushes for structural reforms.

"The structural reform agenda and broadening growth drivers remain key to ensuring that medium-term growth stays at around 8 per cent. The GST is the next item on the 'to do' list. India remains largely insulated from the China-driven ups and downs facing the rest of the region," S&P said in its APAC Economic Snapshots.

It said India's growth rate will improve to 7.9 per cent in 2016-17 and 8 per cent a year later. Growth in 2015-16 has been estimated at 7.6 per cent.

Terming the passage of bankruptcy law by Parliament as a "big news", it said this is a much needed structural reform that should help the process of cleaning bank books and improve the credit transmission channel.

S&P said the downside risks to the growth forecast have eased in recent months with a positive monsoon forecast, financial markets calming, a prudent budget being passed, and the structural reform agenda continuing to make headway.

"We are still waiting for signs of sustained rural consumption as well as investment to support growth," S&P said.