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India projected to grow at 8% this fiscal: World Bank

harrywan 3 years ago 2 min read

India is projected to grow at 8% over the current fiscal year (April 1 to March 31), and 7.1% of the next fiscal year (TA 2023-24), the World Bank said in the norms of forming the economy of South Asia’s annual economy annual. : New way forward, released on Wednesday, in run-up to the World Bank IMF spring meeting. The country is estimated to have grown at 8.3% in the fiscal year that has just passed, after a 6.6% contraction in the previous year due to the Pandemic Covid-19.

For the South Asia region, growth is expected to be slower than projected, by 1 percentage point, 6.6% by 2022 and 6.3% the next calendar year. This was due to the Russian War in Ukraine, which has had an impact on the region, when it has experienced growth “uneven and fragile”, the increase in commodity prices, congestion of the vulnerability of the financial sector.

External shocks

“Given these challenges, the government needs to carefully plan monetary and fiscal policy to fight external shocks and protect vulnerable, while laying the foundation for green, resilient and inclusive growth,” Hartwig Schafer, World Bank Vice President for South Asia, said Press statement.

There is limited space for fiscal stimulus and supply congestion more than significance than ineffective demand, Hans Timmer, the head of the World Bank economist for the South Asian region, told reporters on a lofting call on Wednesday.

Asked about the impact of sanctions against Russia in the South Asia region, Mr. Timmer said the impact was indirect, not direct, given the relatively low import and export proportions going to and from Russia and Ukraine. Indirect impacts are through the impact of global sanctions on commodities and financial markets.

All countries in the region will face challenges in front, despite “solid” GDP growth during recovery, according to the report.

In the case of India, household consumption will be limited due to incomplete labor market recovery and inflationary pressure.

Greener fuels

The report shows that countries in this region move towards fuel and more green commodities in response to the increase in fuel prices and the introduction of green taxes. This will also be a source of new government revenue.

Timmer said the recommendation of green taxes applied to both companies that polluted and energy prices, when asked by Hindu whether the World Bank advocated for tax fuel consumption when prices were high.

“It’s really inefficient to support vulnerable households by subsidizing energy,” said Mr. Timmer. “The money can be much better used when the right price for energy is charged and then re-distributed in a way that truly targets poor households,” he said, adding that it was a gradual process and could not be resolved “last night”.