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CoverStory

PARADOX CALLED

INDIAN ECONOMY

TThree reports regarding the Indian economy released almost simultaneously present diametrically
opposite viewpoints. While a study report by scholars of Harvard University points to the country’s
great slowdown, the UK based CEBR claims that India may become the fourth-largest economy in
near future. And now a World Bank report lowers India’s growth to its 11 year low. We present all the
three versions to find out as to where is Indian economy headed for?

INDIA EYES 5% GDP GROWTH

IN 2020-21: WORLD BANK

tehelka bureau
he World Bank in its latest report released cent while Sri Lanka’s GDP is expected to rise to 3.3
on January 8, 2020 has lowered India’s GDP per cent. Bangladesh, however, seems to be in a bright
growth to five per cent for the fiscal year 2020- spot as its GDP is predicted to ease to 7.2 per cent.
T21 from its earlier estimated six per cent. In the The report makes it clear that India has to boost up
World Bank report “2020 Global Economic Prospects domestic consumption if it wants to achieve prime
“ its projection for India GDP in 2021-22 has also come minister, Narendra Modi’s dream of a $5 trillion
down to just 5.8 per cent, indicating that economic economy.
recovery could take longer than expected. Ironically, downward forecast comes for India
when World Bank reports says that global economic
WHY SLOWDOWN growth is forecast to edge up to 2.5 per cent in 2020
The World Bank said in its report “India, where weak- as investment and trade gradually recover from last
ness in credit from non-bank financial companies is year’s significant weakness but downward risks per-
expected to linger, growth is projected to slow to 5 per sist, the World Bank says in its January 2020 Global
cent in financial year 2019-20, which ends March 31 Economic Prospects. However, growth among
and recover to 5.8 per cent the following fiscal year”. advanced economies as a group is anticipated to slip
The World Bank report shows that GDP projection to 1.4 per cent in 2020 in part due to continued soft-
of 5 per cent is the second lowest for India after it had ness in manufacturing.
predicted growth at 3.1 per cent in the financial year Growth in emerging market and developing
2008-09 due to the global financial crisis. economies is expected to accelerate this year to 4.1
per cent. This rebound is not broad-based; instead, it
NEED FOR STRUCTURAL REFORMS assumes improved performance of a small group of
Commenting on the findings of the report, World Bank large economies, some of which are emerging from a
Group Vice President for Equitable Growth, Finance period of substantial weakness. About a third of
and Institutions, Ceyla Pazarbasioglu said policymak- emerging market and developing economies are
ers should focus on broad-based growth through projected to decelerate this year due to weaker-than-
structural reforms and reduce overall poverty levels. expected exports and investment.
Among India’s neighbours, the WB report showed “With growth in emerging and developing econo-
that Pakistan’s growth is expected to rise to three per mies likely to remain slow, policymakers should seize

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