New Delhi: World Bank on Tuesday scaled down India's growth forecast to 6.1 per cent for the current fiscal from 7 per cent projected six months ago. The decline in the growth forecast is largely due to the decline in agriculture sector which is expected to grow at 2 per cent during 2013-14 against the previous estimate of 2.7 per cent despite normal monsoon projection.
However, the multi-lateral funding agency said that India is regaining economic momentum and growth is expected to recover gradually to its high long-term potential. As per the latest India Development Update of the World Bank, Indian economy would grow by 6.1 per cent in 2013-14 on account of robust domestic demand, strong savings and investment rate.
Growth projections for 2013-14 has been arrived at by taking into account present internal and external factors. "Economic growth is likely to accelerate to over 6 per cent during the current financial year (April 2013-March 2014). Growth is expected to increase further to 6.7 per cent in 2014-2015," said Denis Medvedev, Senior Country Economist, World Bank, India.
The decline in the growth forecast is largely due to the decline in agriculture sector which is expected to grow at 2 per cent during 2013-14.
"Recent data point to some improvements in economic activity: inflation and trade deficit came down in recent months, while private consumption and investment growth had accelerated in the third quarter of 2012-2013," he said. According to the Update, a twice yearly report on the Indian economy and its prospects, GDP growth during 2012-13 would be around 5 per cent, lowest in the decade.
As per the International Monetary Fund (IMF) report released on Monday India's GDP is likely to improve to 5.7 per cent during year ending December 2013 and further to 6.2 per cent a year after.