A World Bank update, analyzing the economic situation in South Asia, forecasts better prospects than earlier expected for the country’s economy. It says that the economic growth may go beyond the projected 8-9 percent in the next two years.
“India’s recovery after the slowdown is well under way. Growth is projected to recover to 8–9 per cent in the next two years. The recovery of Indian GDP could be even faster than what is projected,” the World Bank’s South Asia Economic Update said.
However, the same report also points out the obstacles than can hamper the growth. The prominent among these are increasing interest rates, appreciation of rupee and enduring slower growth rate in developed nations leading to dwindling export revenue. India’s rising inflation and volatility in capital inflows too may pose risks to the economic growth.
Backed by the stellar performance of the manufacturing sector, the economy grew by 8.6% during Jan-Mar 2010 quarter. This helped in boosting the growth rate to 7.4% in the fiscal 2009-10, which is slightly more than expected 7.2%.
The growth rate is an improvement on the previous financial year when the economy expanded by 6.7% due to the effects of global recession. In the three years prior to this, the country’s economy had grown at the rate of 9%.
For the ongoing fiscal, the expected growth rate is 8.5%. The present plan is to achieve pre-recessive growth in the next fiscal, i.e., 2011-12.
According to the latest prediction by World Bank, India may be able to reach pre-recessive growth rate in the current fiscal itself, provided other factors are favorable.
The World Bank report has also predicted 7% growth for South Asian economy for 2010 and 8% for 2011.
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Indian economy is performing quite well after the global economy crisis partly due to its isolation with the world economies and due to the nature of indian people spending and their tight control on money.But unfortunately this grouth will definitely wont tricle to all the classes of the society and india will continue to harbour worlds largest poor and malnurished population and india will continue to spend the major portion of this money on purchasing arms from other countries.