The World Bank on Wednesday said that driven by private consumption, investments and exports, India’s economy is expected to grow at 7.3% in the next fiscal. According to reports, the Washington based agency stated that India’s growth story is credible in the long run.
For the current fiscal, the GDP growth has been predicted at 6.7%. For the 2019-20 fiscal the growth is expected to be more than 7.5%.
The World Bank in its India Development Update said that India’s GDP growth saw a temporary dip in the last two quarters of 2016-17 and the first quarter of 2017-18 due to demonetisation and disruptions surrounding the initial implementation of GST (Goods and Services Tax). It added that services will continue to be the main driver for economic growth.
Junaid Ahmed, World Bank country director in India stated that India’s long-term growth has become more steady, stable, diversified and resilient. The organisation has also predicted that with the implementation of GST, manufacturing is expected to accelerate and industrial activity will grow.
“India’s long-term growth has become more steady, stable, diversified and resilient. In the long-run, for higher growth to be sustainable and inclusive, India needs to use land and water, which are increasingly becoming scarce resources, more productively, make growth more inclusive, and strengthen its public sector to meet the challenges of a fast-growing, globalizing and increasingly middle-class economy.” : Junaid Ahmed, World Bank Country Director for India
The report, which was discussed with chief economic advisor Arvind Subramanian last week, added that the Indian economy will soon recover from the impact of demonetisation and GST and growth rates will slowly revert to a consistent level.
The report also added that in order to achieve a growth rate of over 8%, India will have to exercise continued reforms and widening of its scopes while resolving issues related to credits and investments and enhancing the competitiveness of exports.
The growth of India’s GDP saw a slight dip in the last two quarters of 2016-17 and in the first quarter of 2017-18 due to disruptions related to demonetisation and GST. Since August 2017, the economy has begun to stabilise and register a steady growth rate.