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World Bank predicted India is far away from ‘Vikas’ in 2020!

Global Economic Prospects by World Bank: What is to say about India’s growth

World Bank, the global financial institution has reduced India’s growth rate to 5% from the earlier prediction of 6% for the year 2020. This move came after the National Statistical Office (NSO) placed India’s GDP at 5% for the current financial year.

Lowest GDP in 11 years 

This is the lowest our GDP has gone in the last 11 years. The last such GDP was in 2008 at 3.9%. According to NSO, the economy will witness a deceleration in various sectors such as manufacturing, construction, agriculture, trade, electricity, hotel and transport sector, financial, real estate gas and water supply and professional services.

What does the latest report say? 

According to the report released by World Bank- Global Economic Prospects, the main weakness in the credit and NBFCs (Non-Banking Financial Companies) will linger. It also cited weak confidence and liquidity issues in the financial sector as major reasons for India’s weak economic growth. The reason for such low business confidence was seen due to low consumer demand.

Read more: NRI Day/ Pravasi Bharatiya Divas 2020: History, Significance, and Facts

Final Words 

However, it also said that a gradual recovery is expected in the second half of the fiscal year. Our neighbor, Bangladesh saw much better economic growth, with its GDP figures reaching above 7 points.

The report also said that global economic growth would be around 2.5%.  The report also mentioned the risk of a global debt crisis. This can be attributed to the large scale borrowing that has taken place in the last 50 years. It stated that the global economy has experienced four waves of debt accumulation in advanced, emerging and developing economies over the past fifty years.

It is the fourth and the most recent wave that began in 2010 which has caused such high debts, more than the last 3 waves. Since 1970, the global debt has reached around 230 percent of GDP in 2018. One of the major contributors to this debt was seen as the large sale borrowings made by China. There is an urgent need to focus on productivity and take steps that will rebuild the economy.

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Harshita Bajaj

Harshita has a background in Psychology and Criminology and is currently pursuing her PhD in Criminology. She can be found reading crime thrillers (or any other book for that matter) or binge-watching shows on Netflix when she is not in hibernation.
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