New Delhi: The World Bank on Wednesday projected India’s GDP growth at 7.3% for the next financial year and accelerate further to 7.5% in 2019 -20.
The World Bank’s biannual publication, India Development Update: India’s Growth Story, expects the economy to clock a growth rate of 6.% in the current fiscal ending 31 March.
The report, however, observed that a growth of over 8% will require “continued reform and a widening of their scope” aimed at resolving issues related to credit and investment and enhancing the competitiveness of exports.
“The Indian economy is likely to recover from the impact of demonetisation and the GST, and growth should revert slowly to a level consistent with its proximate factors that are, to about 7.5% a year,” the report said.
In November 2016, the government had scrapped high-value currency notes of Rs 500 and Rs 1,000 in a bid to check black money, among others.
Later, India implemented its biggest indirect tax reform Goods and Services Tax (GST).
Both of these initiatives had impacted the economic activities in the country in short run.
India’s economic growth had slipped to a three year low of 5.7% in April-June quarter of the current fiscal, though it recovered in the subsequent quarters.
The economy is expected to grow at 6.6% in the current fiscal ending 31 March, as per the second advanced estimates of the Central Statistics Office (CSO), compared to 7.1% in 2016-17. The earlier estimate was 6.5%.
The Economic Survey tabled in Parliament has projected a growth rate of 7 to 7.5% in the 2018-19 financial year.
The World Bank report further said that accelerating the growth rate will also require continued integration into global economy.
It pitches for making growth more inclusive and enhancing the effectiveness of the Indian public sector.