The World Bank on Tuesday forecasted India’s economy (GDP) to grow to 8.3 % from 10.01% in the financial year 2022 predicted earlier, further forecasted India’s growth to be 7.5% in the financial year 2023 according to global economic prospects reports on global economic recovery post-Covid-19 pandemic. Even after the devastating second wave of Covid-19 which has hampered India’s economy and slowed down the economic revival in early 2021.
The Second wave of Covid-19 was the largest outbreak in the world since the beginning of the deadly pandemic, as in April and May whole India struggled with Covid-19 with more than 3 lakhs daily new cases, and also government & private hospital both were reeling under an immense shortage of oxygen cylinders, beds, and supply of medical types of equipment and medicines.
In 2020 India’s economy is estimated to have contracted by 7.3% while in 2019, it registered a growth rate of 4%, further adding to that in the financial year in 2023 India’s GDP is expected to grow at 7.5%.
The pandemic will undercut consumption and investment as confidence remains depressed and balance sheets damaged. The growth soon is expected to slow, reflecting lingering impacts of Covid-19 on households, corporates, and banks balance sheets; possibly low levels of consumer confidence, and heightened uncertainty on the job and income prospects.
The global agency also said that economic activity will benefit from policy support including higher spending on infrastructure, rural development, healthcare, and an unexpectedly strong rebound in services and manufacturing sectors.
The World Bank in its reports noted the policy shifts towards healthcare and infrastructure expenditure in the Union Budget by the government of India.
The government declared that health-related spending would more than double and set out a revised medium-term plan intended to address the economic legacy of the pandemic. However, the renewed outbreak may require further targeted policy support to address the health and economic costs.
On 7th June Monday Prime Minister Narendra Modi also announced free foodgrains for the poor’s till Diwali, free vaccination drive for 18-45 age groups regulated by the Centre while addressing the whole nation on Monday. However the Centre has not yet declared any stimulus package, so, such sudden announcements will have a financial burden and economic impact on India’s economy.
Meanwhile, the RBI in May had announced that it will transfer a surplus of ₹99,122 crores to the central government for the nine-month accounting period that ended on March 31, 2022, this surplus transfer amount is the second-highest ever in any financial year.
So, seeing all this Covid-19 situation Central and State government coordinated efforts are essential to accelerate the vaccination distribution drive and debt relief for the people, as such steps will be a welcome sign of India’s economic recovery.