The World Bank has lowered India’s growth forecast for the current fiscal year to 6.3% due to the ongoing Covid-19 pandemic and related disruptions. The bank had earlier projected India’s growth at 8.3% in April 2021. The revised forecast is the lowest among major global economies and highlights the challenges faced by India in recovering from the pandemic.
In a statement released on April 5, the World Bank cited a surge in Covid-19 cases, the slow rollout of vaccinations, and rising inflation as key factors behind the downward revision. The bank also expressed concerns about the impact of the pandemic on the country’s informal sector, which accounts for a significant portion of India’s economy.
The World Bank’s report comes as India struggles to contain a new wave of Covid-19 infections, with daily cases hitting record highs in recent weeks. The country has reported over 12 million cases and more than 160,000 deaths since the start of the pandemic.
Meanwhile, the Asian Development Bank (ADB) has projected India’s growth at 6.4% for the fiscal year 2023, citing a pickup in economic activity and investment as key drivers. The bank also noted that the government’s stimulus measures, including increased spending on infrastructure and rural development, were expected to support growth.
However, the ADB cautioned that rising inflation and a slow vaccination rollout could pose risks to the country’s economic recovery. The bank also highlighted the need for continued policy support to ensure sustained growth in the long term.
India’s economic growth has been on a downward trend in recent years, with growth rates falling from over 8% in 2016 to 4.2% in 2019. The pandemic has only worsened the situation, with the country experiencing its first recession in four decades in 2020.
To address the challenges posed by the pandemic, the Indian government has announced several measures, including a $266 billion economic stimulus package and reforms aimed at attracting foreign investment. The government has also launched a nationwide vaccination drive and is working to accelerate the pace of vaccinations.
Despite these efforts, the country’s economic recovery remains uncertain, with experts warning that the impact of the pandemic could be felt for years to come. The World Bank and ADB reports highlight the need for continued policy support and international cooperation to ensure a sustainable and inclusive recovery.
In conclusion, the World Bank’s downward revision of India’s growth forecast for the current fiscal year underscores the challenges faced by the country in recovering from the pandemic. While the ADB’s projection of 6.4% growth for the fiscal year 2023 is more optimistic, it also highlights the need for continued policy support and vigilance in addressing potential risks. As India continues to grapple with the pandemic and its economic fallout, it will be crucial for the government and international community to work together to ensure a sustainable and inclusive recovery.