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UNCTAD Forecasts Growth of India at 6%

Why in News?
The United Nations Conference on Trade and Development (UNCTAD) has predicted the country’s growth rate to a middling 6% in 2019, down by 1.4% from the previous year.

About the Forecast
The slump in the growth rates has been attributed to the below-target collections from the Goods and Services Tax (GST). It was also fuelled by fiscal consolidation efforts to limit public spending. This will in turn slow growth in the Asian region as a whole.

India’s economic growth had gone down to a 25 quarter low of 5% in the months of April-June. The Central Bank has revised downward the FY20 growth rate to 6.9% from 7% after cutting the key lending bank rate four times in succession, totaling upto 110 basis points.

As per the reports of UNCTAD, both China and India, the fastest growing economies in the world, are demonstrating signs of slowness in their respective growth momentum.

The reported slowing down of the Indian economy has made the Government to announce a slew of measures to accelerate the economic activity.
The government has slashed base corporate tax rate to 22% from 30% in domestic companies and proposed a competitive 15% rate for new manufacturing units, offering a 1,45 lakh crore fiscal boost as a part of steps to revive growth.

UNCTAD is the part of the United Nations Secretariat dealing with trade, investment, and development issues. The organization’s goals are to: “maximize the trade, investment and development opportunities of developing countries and assist them in their efforts to integrate into the world economy on an equitable basis”. UNCTAD was established by the United Nations General Assembly in 1964 and it reports to the UN General Assembly and United Nations Economic and Social Council.

The primary objective of UNCTAD is to formulate policies relating to all aspects of development including trade, aid, transport, finance and technology. The conference ordinarily meets once in four years; the permanent secretariat is in Geneva.

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