India development update : fiscal policy for equitable growth

India's economy expanded by 7.3 percent in FY14-15 and 7.0 percent in Q1 FY15-16 (y/y). Industrial growth increased and despite government services slowing down, services expanded. Domestic drivers increased, while exports declined. Private consumption growth stayed strong and investments gained momentum. Gross domestic product is expected to increase gradually to 7.5 percent in FY15-16. The positive outlook is dependent upon the implementation of important domestic reforms which include: boosting the balance sheets of the banking sector through a sustainable solution of the debt overhang of primarily power and road infrastructure firms, continuing to improve the ease of doing business and enacting the crucial Goods and Services Tax, and enhancing capacity of state and local governments to deliver public services as more resources are devolved from the centre.