World bank forecasts India’s economic growth rate

General Studies Paper 3

Context: The World Bank has released a report titled “South Asia Economic Focus: Expanding Opportunities: Toward Inclusive Growth,” which provides an economic forecast for India, Sri Lanka, and Pakistan.

What are the Major Highlights of the World Bank Report?

• India:
  • Growth Rate:
    • India’s growth rate has been downgraded to 6.3% for FY 2023-24 ,and the report cites high borrowing costs and slower income growth as the primary reasons for this downgrade
      • The female labour participation rate and the size and productivity of the informal sector are also concerns in India.
    • However, the services sector and the construction sector are the fastest-growing industries in India, with strong investment growth and high business confidence.
    • India’s growth rate is expected to grow at 4% in FY 2024-25, which is an upgrade of0.3 % points from the previous forecast.
  • Sri Lanka and Pakistan:
    • The outlook for Sri Lanka and Pakistan is bleak, with Sri Lanka experiencing a contraction of -4.3% in 2023 and negotiating a USD 3 billion loan from the IMF, while Pakistan is forecasted to have a growth rate of 4% for the year ending June 30, 2023.

What are the Major Projects in India Supported by the World Bank?

• India Energy Efficiency Scale-up Program:The development objectives of Energy Efficiency Scale-up Program for India are to scale up energy savings in residential and public sectors, strengthen Energy Efficiency Services Limited’s (EESL) institutional capacity, and enhance its access to commercial financing.
• Pradhan Mantri Gram Sadak Yojana:The project aims to connect unconnected habitations with all-weather roads. Key to the program is an all-weather access to the respective roads.
• Eastern Dedicated Freight Corridor Project:The Government of India and the World Bank today signed a USD 650 million agreement for faster and more efficient movement of raw materials and finished goods between the north and eastern parts of India.
• Innovate in India for Inclusiveness:The development objective of Innovate in India for Inclusiveness is to facilitate innovation in biopharmaceutical products  and medical devices that address public health priorities in India.
• National Dairy Support Project:The development objective is to increase the productivity of milch animals and improve market access of milk producers in project areas.