World Bank Estimates Huge Drop in India's Growth Rate!

Following a broad-based deceleration in the initial quarters of this fiscal year, the World Bank, on Sunday, estimated India's growth rate to fall down to 6% from 2018-2019’s 6.9%

In its latest edition of the South Asia Economic Focus, the World Bank said that it was expecting India to gradually recover to 6.9% in 2021 and 7.2% in 2022.

While India marked a 7.2% growth rate in 2017-2018, in 2018-2019 the number decelerated to 6.8%. Despite manufacturing and construction activities trying to uphold the economy, agriculture and services sector couldn't help.

The report further states that poverty in the country is still declining, but at a slower pace than before. Between 2011-2012 and 2015-2016, the poverty rate declined from 21.6 to 13.4%. The introduction of GST and demonetization, along with increasing unemployment, might have heightened the risks for poor households.

"This will require restoring the health of the financial sector through reforms of public sector banks' governance and a gradual strengthening of the regulatory framework for NBFCs, while ensuring that solvent NBFCs retain access to adequate liquidity."It will also require efforts to contain fiscal slippages, as higher-than-expected public borrowings could put upward pressure on interest rates and potentially crowd-out the private sector," the bank was quoted as saying by Mint.