World Bank’s growth forecast for India

Source: The post World Bank’s growth forecast for India has been created, based on the article “Trading up: World Bank’s growth prognosis for India moots some policy shifts” published in “The Hindu” on 5th August 2024

UPSC Syllabus Topic: GS paper 3 – Indian Economy -growth, development and employment

Context: The article discusses India’s revised GDP growth forecast for 2024-25, now at 7%, and highlights the World Bank’s concerns. It emphasizes the need for job creation, boosting trade, and addressing barriers to exports, investments, and foreign trade agreements.

For detailed information on World Bank Raises India’s Economic Growth Forecast read this article here

What is the World Bank’s growth forecast for India?

1. 2024-25 Growth Forecast: The World Bank raised India’s GDP growth forecast to 7%, up from its earlier estimate of 6.6%. This is in line with the projections of the International Monetary Fund and the Asian Development Bank but slightly lower than the 7.2% predicted by the Reserve Bank of India and Fitch Ratings.
2. Global Economic Context: Despite a weak global economy, with global growth expected to remain at 2.6%, India’s economy is projected to perform strongly.
3. Sectoral Growth: Private consumption is expected to rise by 5.7%, and the agricultural sector is predicted to grow by 4.1%, which could help balance out a moderation in industrial growth.
4. Challenges for Non-Farm Jobs: While the Production Linked Incentive schemes support manufacturing, they may not generate enough jobs for India’s young workforce. The Bank urges a rethink of strategies to create more non-farm employment opportunities.
5. India’s Trade Strategy: India’s global trade share does not reflect its economic size. The World Bank recommends reducing tariffs, non-tariff barriers, and foreign direct investment curbs. It also calls for revisiting India’s stance on multilateral trade agreements like the RCEP to boost trade.

Question for practice:

Discuss the World Bank’s revised GDP growth forecast for India in 2024-25 and the challenges highlighted in relation to job creation and trade.