- According to the World Bank, India’s economy, South Asia’s largest, is expected to grow by 8.3% in the fiscal year 2021-22.
- The South Asia economic focus report projects the region to grow by 7.1% in 2021 and 2022. It is a biannual economic update presenting recent economic developments and a near-term economic outlook for South Asia.
- Other Major reports of the World bank include Human Capital Index, World Development Report. Recently, it has decided to discontinue the practice of issuing ‘Doing Business reports’.
- The projected growth (8.3%) is supported by an increase in public investment to bolster domestic demand and schemes like the Production Linked Incentive (PIL) to boost manufacturing.
- India’s Gross Domestic Product (GDP) increased by 20.1% in the first quarter (April-June quarter) of financial year 2021-22 in the backdrop of “a significant base effect, limited damage to domestic demand and strong export growth”.
- In the first quarter of financial year 2020-21, GDP of India contracted by 24.4% because of nationwide coronavirus lockdown.
- The World Bank also observed that the disruption in India’s economy during the second wave of the pandemic was limited, compared to the first.
On Economic Recovery:
- Economic recovery across various sectors in India has been unequal.
- Manufacturing & construction sectors recovered steadily in 2021 but low-skilled individuals, self-employed people, women and small firms were left behind.
- The extent of recovery in the financial year 2021-’22 will depend on how fast household incomes recover and activity across informal sector & smaller firms normalises.
- India’s economic prospects will be determined by its pace of vaccination against Covid-19 and successful implementation of agriculture & labour reforms.
Need for Regulatory Experimentation:
The Bank called on South Asian countries to lower entry barriers in the services sector, creating more national and international competition while curbing the “emergence of new monopoly powers”; aiding labour market mobility and upgrading of skills; and enabling the absorption of these new services by households and firms.
SOURCE: THE HINDU,THE ECONOMIC TIMES,MINT