India estimated to grow at 8.3% in the current fiscal: World Bank

The Bank released a South Asia economic focus report ahead of its annual meetings which start next week in Washington.

(GDP) in the current fiscal year is estimated to grow by 8.3%, the World Bank said as it released a South Asia economic focus report ahead of its annual meetings which start next week in Washington. This growth estimate is supported by an increase in public investment to bolster domestic demand and schemes, like the production-linked incentive to boost manufacturing.

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Despite being ravaged by a second earlier this year, the economic impact of the pandemic this year has been “relatively small” compared to the impact in 2020, said the report, titled, Shifting Gears: Digitization and Services-Led Development. Growth is expected to settle at around 7% over the next two years (7.5% forecast in FY2022/23 and 6.5% in FY2023/24) as the base effect fades (i.e., a contraction of 7.3% last year), supported by infrastructure investment, as well as reforms to ease supply-side constraints. Downside risks in the medium term include uncertainty around asset quality deterioration due to the pandemic, slow recovery in the informal sector and higher than expected inflation, the Bank said.