Faced with an unprecedented downturn, India needs to continue with critical reforms to reverse the sudden and steep effect of the COVID-19 pandemic on its economy, according to the World Bank, which, in its twice-a-year-regional update, has forecast a sharper than expected economic slump across the region, with regional growth expected to contract by 7.7 per cent in 2020 after topping 6 per cent annually in the past five years.

India’s economy, the region’s largest, is expected to contract by 9.6 per cent in fiscal 2020-21, the latest South Asia Economic Focus says. India’s growth is projected to rebound to 5.4 per cent in fiscal 2021-22, mostly reflecting base effects, assuming pandemic-related restrictions are completely lifted by 2022.

Weak activity, domestically and abroad, is also likely to depress both Indian imports and exports.

Hartwig Schafer, World Bank vice president for the South Asia region, termed the Indian government’s response to the pandemic ‘swift and comprehensive’.

“India is undertaking far-reaching reforms in its safety nets program. This will help the country to preserve its hard-won gains against poverty as nearly half of all households are vulnerable and the majority of the workforce lacks formal social security benefits. We are also encouraged by the recent amendments to India’s social security laws that will help provide coverage to groups of people who were earlier left out from government-assisted programs,” said Junaid Ahmad, World Bank country director in India, in a press release.

The pandemic has also brought to the forefront new economic opportunities where digital technologies can play an essential role, providing new growth levers for South Asian countries, including India, the report said.

Fibre2Fashion News Desk (DS)

Disclaimer - All News/Articles items are subject to copyright and no article either in full or part may be reproduced in any form without permission from Fibre2Fashion Pvt. Ltd.