Setback for India as World Bank decreases growth rate estimates
India has received a setback from the World Bank amid the economic downturn. The World Bank has now reduced the estimate of India’s growth rate. The World Bank has reduced India’s growth rate to 6 percent. India’s growth rate in the year 2018-19 was kept at 6.9 percent. However, in the latest edition of South Asia Economic Focus, the World Bank also said that in 2021, India can recover the growth rate again to 6.9 percent.
India is lagging for two consecutive years
The World Bank has said that India’s economic growth rate has fallen for the second consecutive year. It was 7.2 per cent in 2017-18, which decreased to 6.8 per cent in 2018-19. However, industrial output growth increased to 6.9 per cent due to increased manufacturing and construction activities, while growth in agriculture and service sectors was 2.9 per cent and 7.5 per cent.
Moody’s reduced GDP estimate
Earlier, credit rating agency Moody’s slashed India’s GDP growth estimate once again. Moody’s estimates that India’s GDP growth for the financial year 2019-20 could be 5.8 per cent. Earlier, Moody’s GDP growth estimate was 6.2 percent. In this context, Moody’s has cut the GDP growth estimate by 0.4 per cent.
Along with this, Moody’s has also given a serious warning about the Indian economy. Moody’s has said that if the economy continues to slow down, the government’s efforts to reduce the fiscal deficit will suffer. With this, the debt burden will also increase.
RBI also gave a shock
Like Moody’s, the country’s central bank RBI has also reduced the growth rate estimate for the current financial year. According to RBI estimates, GDP growth in this financial year can be at the rate of 6.1 percent. Earlier, RBI had projected GDP growth at the rate of 6.9 per cent. Within a few months, the RBI has cut the projected GDP growth by 0.8 per cent.
At the same time, International Monetary Fund (IMF) Chief Kristalina Georgieva is warning about the economic slowdown. She said that economic slowdown is being seen in the global economy, due to which the growth rate of 90 percent countries will be slow. Due to the fast emerging economy, its impact will be seen most in India.
Significantly, according to the figures of the Government of India, the GDP growth rate was recorded at 5 percent in the quarter ended in June. This is the minimum since March 2013. At that time the GDP growth rate had reached 4.7 percent.
