The World Bank recently cut its 2021-22 gross domestic product (GDP) growth forecast for India to 8.3 per cent from 10.1 per cent estimated in April, saying economic recovery is being hampered by the devastating second wave of the pandemic. In its latest issue of Global Economic Prospects, it projected a 7.5 per cent economic growth for fiscal 2022-23.
The multilateral lending agency said India's GDP is likely to grow by 6.5 per cent in 2023-24.
An enormous second COVID-19 wave in India is undermining the sharper-than-expected rebound in activity seen during the second half of fiscal year 2020-21, especially in services, the bank said in the report.
"India's recovery is being hampered by the largest outbreak of any country since the beginning of the pandemic," the World Bank said.
The projected growth compares to the worst ever contraction of 7.3 per cent witnessed in the fiscal ended March 31, 2021 (FY21) and 4 per cent expansion in 2019-20.
In April this year, the World Bank had forecast a 10.1 per cent growth in Indian GDP for FY22. This was higher than 5.4 per cent it had projected in January. But now the projections have been slashed.
Activity will benefit from policy support, including higher spending on infrastructure, rural development, and health, and a stronger-than expected recovery in services and manufacturing, it said.
"In India, fiscal policy shifted in the FY 2021/22 budget toward higher expenditure targeted at healthcare and infrastructure to boost the post-pandemic recovery. The renewed outbreak, however, may require further targeted policy support to address the health and economic costs," it added.
Fibre2Fashion News Desk (DS)