Indian Economy To Bounce Back In 2021: WB

In its latest edition of the Global Economic Prospect the World Bank has said that the Indian economy is expected to bounce back in 2021. "In India, growth is estimated to have slowed to 4.2 per cent in the fiscal year 2019/20 (the year ending in March-2020) and output is projected to contract by 3.2 per cent in fiscal year 2020/21, when the impact of COVID-19 will largely materialise. "Stringent measures to restrict the spread of the virus, which heavily curtail short-term activity, will contribute to the contraction," it said in the report. The World Bank said spillovers from the weaker global growth and balance sheet stress in the financial sector will also weigh on activity, despite some support from the fiscal stimulus and continued monetary policy easing. According to the report, the central bank has been purchasing government bonds to further ease the financial conditions. The Indian government has also increased its spending on healthcare to bolster the COVID-19 response, wage support, in-kind and cash transfers to lower-income households, deferral of tax payments, as well as loan and liquidity support for small businesses and financial institutions. The growth rate of the Indian economy in fiscal 2017 was seven per cent, which dropped to 6.1 per cent in fiscal 2018 and to 4.2 per cent in fiscal 2020, The real impact of the COVID-19 and lockdown would be felt in the current fiscal (2020-21) beginning April, the bank said as it forecast a negative growth rate of 3.2 per cent.