Washington, June 11 (PTI): The World Bank feels that India can achieve a growth rate of 5.5 per cent this year against 4.7 per cent last year with the new government showing signs of economic reforms and bringing in transparency in governance.
“I think there is, overall, a sense that the recognition of the need for domestic solutions to policies is increasingly evident in India,” World Bank economist Andrew Burns said yesterday.
“The situation in India has obviously gone through a difficult period for the last couple of years, with growth falling below 5 per cent after being at eight and even higher,” Burns, lead author of the World Bank global economic outlook, said.
“Much of that has been a reflection of this process of being overheated and over-inflated, and a natural slowing of the economy. But there has also been a concern that the domestic reforms process had lost momentum,” Burns said.
“We saw early signs, I think, even before the election, of a deblocking of some of these obstacles. We saw a number of investment projects that had been held back being given the go-ahead. And all of that is part and parcel of our forecast which, for India, is for growth to accelerate from 4.7 per cent last year to 5.5 per cent this year, 6.3 per cent next year, and 6.6 per cent in 2016,” Burns said.
According to the report, GDP growth in South Asia slowed to an estimated 4.7 per cent in market price terms in calendar year 2013 (2.6 percentage points below average growth in 2003-12). This weakness mainly reflects subdued manufacturing activity and a sharp slowing of investment growth in India.
Meanwhile, the International Monetary Fund said India should continue to gradually bring down the fiscal deficit and usher in fuel subsidy reforms.
Inflation, which has been at high levels, is also a key challenge for the country, Thomas J. Richardson, IMF senior resident representative in India and Nepal, has said.
The country’s fiscal deficit stood at 4.5 per cent of the gross domestic product in the previous financial year.