Emerging Asia, including India, is likely to see growth in consumption rather than in investment, says a BofA-ML report. In India, the disbursal of 7th Pay Commission hikes to central government employees, softer lending rates and lower oil prices are expected to support discretionary spending. In emerging Asian markets, consumption is expected to rise by 1.2 percent of GDP (almost USD 1 trillion in nominal terms) over 2016-17, while, investment is likely to fall by 1.8 percent of GDP over 2016-17. “We estimate consumption will rise to 46.1 percent of GDP in 2017 from 44.9 percent of GDP in 2015. In nominal terms, this amounts to USD 900 billion of cumulative incremental consumption in emerging Asia over 2016-17,” it said. In contrast, investment will expand by just USD 260 billion over 2016-17, it added. “We advise investors to play consumption over investment in emerging Asia,” BofA-ML said in a research note,” adding that “as lower-than-potential growth is limiting the need for expanding capacity in virtually every emerging Asian economy”. According to the global financial services major, consumption is rising over investment across emerging Asian economies barring Indonesia, Korea and the Philippines. Regarding India, the report said the 7th Pay Commission supports discretionary spending. “India has an idiosyncratic driver in its 7th Pay Commission that will hike salaries of 20 million government employees by about 50 bps of GDP a year for, say, three years,” the report added. The Union Budget 2016 has allocated for 60-70 percent of this outgo. “This is expected to spur discretionary demand of 1percent of GDP in conjunction with lower rates, savings on lower oil prices and higher public rural expenditure,” it added.