India is forecasted to grow 7.3% in the current fiscal and 7.5% the next year, while South Asia will grow 6.9% in 2018 and 7.1 in 2019, as said in World Bank report.
While demonetization and the GST are expected to increase the formalization of payments and the efficiency of transactions in India. Both nation has created short-term disruptions in economic activity.
“India’s economy has bottomed out from the deceleration caused by one-time policy events such as demonetization and GST introduction,” the World Bank report said.
Private consumption will remain the primary driver of growth while the services sector and, increasingly, the industrial sector will lead production growth.
It analysed data from 2001onwards and concluded that employment does respond to economic growth in the short term, implying that growth is not jobless. Every month, the working age increases by 1.3 million people and India must create 8.1million jobs a year to maintain its employment rate, which has been declining based on employment data analysed from 2005 to 2015, largely due to women leaving the job market.
Rapid growth alone will not be sufficient to bring South Asian employment rates to the levels observed elsewhere in the developing world.
In addition to high growth, more and better jobs need to be created for every percentage point of growth.