World Bank on Tuesday released a report forecasting India’s economy to grow by 7.5 percent in the current fiscal year.
This means India has retained its top spot as the fastest growing major economy again, that the bank made in January.
Meanwhile, the Bank reported India’s economy grew by 7.2 percent in 2018-19 in contrast to the recent Indian Central Statistical Office (CSO) estimate of only 6.8 percent growth during the period.
This comes at a time when newly inducted Finance Minister Nirmala Sitharaman prepares to present her first budget. This will also be Modi government’s first budget after storming back to power last week.
India “is estimated to have grown 7.2 percent in the fiscal year 2018-19, which ended March 31”, the report said. “A slowdown in government consumption was offset by solid investment, which benefited from public infrastructure spending”.
The World Bank report said, “Growth in India is projected to accelerate to 7.5 percent in FY 2019-20.”
“Private consumption and investment will benefit from strengthening credit growth in an environment of more accommodative monetary policy, and with inflation below the Reserve Bank of India’s target”, it added.
However on May 31, just around the Finance Minister the CSO said that India’s gross domestic product (GDP) growth during the 2018-19 fiscal stood at 6.8 percent, lower than the previous year’s 7.2 percent.
According to a report published in Business Standard (BS), growth projections for India made by different organizations vary a lot. Last month, UN downgraded India’s growth rate for the current fiscal year to 7 percent, a cut of 0.6 percent from the projection made in January and reduced the forecast for the next fiscal year by 0.4 percent to 7.1 percent. It estimated last fiscal year’s growth rate to be 7.2 percent.
In April, the IMF cut India’s growth projections for this year by 0.2 percent from the 7.5 percent made in January to 7.3 percent. It projected next year’s growth at 7.5 percent, though lower than the earlier 7.7 projection, BS reported.