India’s economic growth is back on track, with a projected growth of 6 per cent in the 2020-21 fiscal year, making the country the fastest growing economy in the world.
Sanjeev Sanyal the principal economic adviser at the Indian finance ministry, said that the economic growth was set to quicken and estimated a growth of 6 per cent in the financial year beginning in April, compared with projected growth of 5 per cent in the present one.
International Monetary Fund (IMF) in its latest report released last month that India’s economic growth per cent will be at par with China’s growth for 2020. The IMF predicted 5.8 per cent growth for China whereas 6.0 per cent growth for India in 2020.
But the Chinese economy is facing hurdles due to the coronavirus outbreak. Hence, some analysts have already reviewed down its growth outlook for the first quarter of the year 2020 to a mere three per cent.
“The inherent uncertainty surrounding the spread of the virus makes it virtually impossible to quantify the wider impact on the world economy. But China’s role at the centre of global supply chains increases the likelihood that the disruption spreads to other countries.
Economies in Emerging Asia look most vulnerable, as do firms operating in both the tech and electronics sectors,” group chief economist at Capital Economics Neil Shearing shared.
IMF forecasts that for 2021, India will be the fastest-growing country amongst major global economies next year at 6.5 per cent trailed by China at 5.8 per cent and other economies between 1 to 2 per cent.
Nirmala Sitharaman, India’s finance minister told the Indian parliament during her budget speech that the signs of ‘green shoots were visible’ and the economy was no longer going to be in distress.
Inflation would fall to four per cent in the coming financial year, after a recent bump driven largely by food prices. However, there is enough space for the central bank to further cut interest rates, moreover, as inflation was likely to ease, a fall in vegetable prices would be seen. More banking funds will be available for private companies despite higher state borrowing as the budget offered tax incentives to sovereign wealth funds insurance funds shared a government adviser, Sanyal. As of disruption, apart from coronavirus outbreak in China, he doesn’t see any other major distraction to India’s economic growth.