Live news , top stories, corporate news, company news, sector news, economy news, results analysis news, ceo interviews, fund manager interview, advisor interview, market news, bazaar talk, hot stocks news, ipo news, commodities news, mutual fund news, insurance news, news wire
23 March, 2018 14:27 IST
World Bank projects 7.3% growth for India in 2018-19
Source: IRIS | 14 Mar, 2018, 04.13PM
Comments  |  Post Comment

The Indian economy is set to revert to its trend growth rate of 7.5 percent in the coming years as it bottoms out from the impact of the Goods and Services Tax (GST) and demonetization, a new World Bank report says.

The India Development Update, released today, is a biannual flagship publication of the World Bank which takes stock of the Indian economy. The current issue (March 2018), titled ''India's Growth Story'' describes the state of the Indian economy, shares India's growth experience and trajectory over the past several decades and provides a long-term perspective on India’s growth outlook. Over the last 50 years, the Update notes that India's average growth has accelerated slowly but steadily across sectors-agriculture, industry and services-and become more stable. This is reflected in increasing labor productivity and total factor productivity. After growing far more rapidly before the global financial crisis, the economy has grown at an average rate of about 7 percent since 2008��"09. 

The Update centers around an assessment of what it will take for India to return to growth rates of 8 percent and higher on a sustained basis. To sustain its growth path, India will need to keep a close eye on several factors to make the country more resilient to shocks: the changing landscape of open trade, reforms in the banking sector, strengthening financial institutions, and regulatory supervision of the financial sector. Deepening its structural reforms in the areas of health, education and service delivery will be critical for development of human capital required to sustain growth.


India's GDP growth saw a temporary dip in the last two quarters of 2016-17 and the first quarter of 2017-18 due to demonetization and disruptions surrounding the initial implementation of GST. Economic activity has begun to stabilize since August 2017. India's GDP growth is projected to reach 6.7 percent in 2017-18 and accelerate to 7.3 percent and 7.5 percent in 2018-19 and 2019-20 respectively. While services will continue to remain the main driver of economic growth; industrial activity is poised to grow, with manufacturing expected to accelerate following the implementation of the GST, and agriculture will likely grow at its long-term average growth rate.

India's growth in recent years has been supported by prudent macroeconomic policy: a new inflation targeting framework, energy subsidy reforms, fiscal consolidation, higher quality of public expenditure and a stable balance of payment situation. In addition, recent policy reforms have helped India improve the business environment, ease inflows of foreign direct investment (FDI) and improve credit behavior.

The Update points to the positive impulse expected from India's novel GST system which, while remaining more complex than comparable systems in other countries, is likely to improve the domestic flow of goods and services, contribute to the formalization of the economy and sustainably enhance growth.

''India's long-term growth has become more steady, stable, diversified and resilient. In the long-run, for higher growth to be sustainable and inclusive, India needs to use land and water, which are increasingly becoming scarce resources, more productively, make growth more inclusive, and strengthen its public sector to meet the challenges of a fast growing, globalizing and increasingly middle-class economy,'' said Junaid Ahmad, World Bank Country Director in India.

Comments Post comment 
 Post Comment
Name Email
Security Code type    into this box
Related Articles
Tata Steel identified as successful resolution application for acquisition of Bhushan Steel - 23-Mar-2018 12:36
Vakrangee ties up with Blue Dart Express - 23-Mar-2018 09:54
Sensex tumbles over 400 points; Nifty below 10,000 - 23-Mar-2018 09:48
Sensex ends 130 points lower; Nifty settles below 10,150 - 22-Mar-2018 16:02
Suven Life Sciences secures 3 overseas product patents - 22-Mar-2018 12:24
Cox & Kings sells 11.58% stake in subsidiary - 22-Mar-2018 12:20
Sadbhav Infra receives LoA for NHAI road project - 22-Mar-2018 10:44
Steel Strips Wheels receives 7,000 wheel order from UK aftermarket - 22-Mar-2018 10:37
Zensar Technologies acquires US based Cynosure Inc - 22-Mar-2018 10:33
Dilip Buildcon declared L-1 bidder for Rs 6.77 bn NHAI project - 22-Mar-2018 10:26
IRB Infrastructure Developers wins Rs 34 bn Hapur bypass BOT project - 22-Mar-2018 10:18
Home  |   Shares  |   F&O  |   Mutual Funds  |   Loans  |   Insurance  |   News Centre
Wealth Tracker  |   Newsletters  |   Tax Corner  |   NRI Centre  |   Advertise
© All rights reserved. IRIS Business Services Limited
A Disclaimer