GDP might contract 9.6%: WB

Tribune News Service

New Delhi, October 8

Hailing the government’s response to Covid, the World Bank said India’s economy is, nevertheless, expected to contract by 9.6 per cent in the current fiscal year.

India’s growth is projected to rebound to 5.4 per cent in fiscal 2021-22, assuming Covid-related restrictions are completely lifted by 2022. Weak activity, domestically and abroad, is also likely to depress both Indian imports and exports, said the World Bank’s latest South Asia Economic Focus report.

‘Delhi’s response was swift’

The Indian Govt’s response to the outbreak was swift and comprehensive. The lockdown was followed by a comprehensive policy package to mitigate the impact on the poorest well as liquidity and financial support for SMEs. — Hartwig Schafer, World Bank VP for South Asia region

The overall growth in South Asia will contract by 7.7 per cent in 2020, after topping six per cent annually in the past five years.

“Informal workers are not generally covered by social insurance and few have savings or access to finance, but the government reworked its social protection architecture especially for them,” said the report.

“Reforms in the Indian safety nets programme will help preserve the gains against poverty as nearly half of all households are vulnerable and the majority of the workforce lacks formal social security benefits. We are also encouraged by the recent amendments to India’s social security laws that will help provide coverage to groups of people who were earlier left out from government-assisted programs,” said Junaid Ahmad, World Bank Country Director in India.

The pandemic will profoundly transform South Asia and leave lasting scars in its economies. “But there is a silver lining towards resilient recovery. It could spur innovations that improve South Asia’s future participation in global value chains, as its comparative advantage in tech services and niche tourism will likely be in higher demand as the global economy becomes more digital,” said Hans Timmer, World Bank Chief Economist for the South Asia Region.

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