India’s growth forecast, by the World Bank, has been raised to 10.1 percent for financial year 2021-22, which started on Thursday, 1 April. The new forecast is significantly higher than World Bank’s previous forecast of 5.4 percent.
India’s growth hit 8.3% in financial year 2016-17. It came down to four percent in the financial year 2019-20.
The World Bank has also pointed out in its report that considering the uncertainty around both epidemiological and policy developments, the real GDP growth for the next financial year can range between 7.5 percent and 12.5 percent, contingent to the vaccination drives, and the requirement of any new restrictions to mobility.
The COVID-19 Impact
The impact of the COVID-19 pandemic will cause a long-lasting change in India’s fiscal trajectory, reported NDTV.
The general government deficit is expected to stay above 10 percent of the GDP until fiscal year 2020-22. Consequentially, the public debt is projected to peak at approximately 90 percent of the GDP in financial year 2020-21, before declining by and by.
Even though, India grew in the last quarter of 2020, the recent surge in coronavirus cases in some areas of the country may adversely impact the economy.
(With inputs from NDTV.)
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