Indian economy will grow at 8.3% in 2021

In its latest issue of Global Economic Prospects, the Washington-based global lender said that even though the forecast has been revised up by 2.9 per cent, its masks significant expected economic damage from the second wave of Covid-19. Besides, it projected the global economy to grow 5.6 per cent this year, up from the 4.1 per cent it forecasted in January. It said that Covid vaccinations and stimulus given by various governments will power the fastest worldwide expansion in nearly five decades.

However, India will benefit from policy support, including higher spending on infrastructure, rural development, and health, and a stronger-than expected recovery in services and manufacturing. Growth in FY2022-23 is expected to slow to 7.5 per cent reflecting lingering impacts of Covid-19.

In 2020, India’s economy is estimated to have contracted by 7.3 per cent while in 2019, it registered a growth rate of four per cent, the World Bank said, adding that in 2023, India is expected to grow at 6.5 per cent.

India accounts for nine-tenths of the upgrade to growth in 2021, as strong services activity more than offsets the economic effects of the worsening pandemic. Fiscal policy shifted in the FY2021-22 budget toward higher expenditure targeted at health care and infrastructure to boost the post-pandemic recovery.