Published: 6th Apr, 2023
Context
The World Bank, in its report, has forecasted a 6.3% economic growth rate for India in the current fiscal year (FY) which ends March 31 2024, a downgrade of 0.7 percentage points since its October 2022 forecast.
Key-highlights of the forecast:
- Report: ‘South Asia Economic Focus: Expanding Opportunities: Toward Inclusive Growth’
- The Indian economy is expected to grow at 4% in FY 2024-25, an upgrade of 0.3 percentage points from the previous forecast.
- The South Asia region as whole is expected to grow at 6% for the financial year 2024-25.
- As per its report, the primary reasons for the forecast includes:
- Its high borrowing costs
- Slower income growth causing weaker consumption
- The government tightening fiscal expenditure
- Major concerns for India remains:
- Lower female labour participation rate, (dropped to below 20%)
- Poor condition of informal sector (neither productive nor shrinking)
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Female labour participation rate: Labour force participation rate is the proportion of the population ages 15 and older that is economically active: all people who supply labour for the production of goods and services during a specified period.
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- The services sector and then the construction sector — were the fastest going industries in India. Investment growth remained strong and business confidence was also high in India.
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IMF’s predictions for India The International Monetary Fund (IMF) has projected India to be the fastest-growing major economy in FY24, retaining the forecast at 6.8% in its latest World Economic Outlook, citing “resilient" domestic demand despite a challenging external environment. |
India’s growth prospects for different sectors:
- India’s economic survey has projected India GDP growth lie in the range of 6 % to 6.8% depending upon the economic and political trajectory.
- The most important and the fastest growing sector of Indian economy are services.
- Trade, hotels, transport and communication; financing, insurance, real estate and business services and community, social and personal services account for more than 60 percent of GDP.
- Agriculture, forestry and fishing constitute around 12 percent of the output, but employs more than 50 percent of the labour force.
- Manufacturing accounts for 15 percent of GDP, construction for another 8 percent and mining, quarrying, electricity, gas and water supply for the remaining 5 percent.
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