The World Bank has forecast an economic growth rate of 6.3% for India in the current fiscal year which has decreased by 0.7% since the World Bank’s last forecast in October. India is also expected to grow at a rate of 6.4% in the next financial year which is a 0.3% upgrade from the World Bank’s last forecast.
As per the World Bank’s report, the primary reasons for this downgrade in the country’s economic growth rate is a culmination of several factors including high borrowing costs, slower income growth and tightening of fiscal expenditure by the government.
The service sector and the construction sectors emerged as the fastest growing sectors in the country whereas the female labour participation rate, which dropped down to 20%, and cracks in the informal sector became a cause of concern. India, however, fared better than the rest of the South East Asian region where the World Bank forecast an economic growth rate of -4.3% and 0.4% for Sri Lanka and Pakistan respectively.
This was written by Ms. Anshika Gupta, Intern, All India Legal Forum.