The Asian Development Bank has projected a growth rate of 10 per cent for India for this financial year.
In a press statement, the multilateral agency said that the economy is projected to rebound in the last three quarters of this year as reflected in improvements in electronic waybills, mobility data, and the purchasing managers’ index.
However, it said that private consumption and investment are likely to remain weak due to the impact of Covid 19 pandemic on household incomes, spending capacity, and lending.
The government’s national monetization plan is expected to drive public investment to boost infrastructure development.
ADB also pointed out that growth in the agriculture sector will remain resilient, yet marginally lower with the pandemic’s spread into rural areas and a delayed monsoon. Exports will also rebound, supported by the recovery in global demand.
In April, the bank had projected an 11 per cent growth rate for India.
Aided by a sharp contraction of 24.4 per cent in the April to June period of the previous financial year, India’s economy during the first quarter grew by 20.1 per cent, despite Covid induced lockdowns imposed in several states.
With this growth rate, India has become the fastest growing economy among the G-20 nations.
Meanwhile, Indian policymakers have reasons to cheer as the country’s vaccination drive has picked up steam. The Indian government has set a target of vaccinating the country’s entire adult population of 94.4 crore by December.
Pace of vaccination will be critical to sustain economic growth.