The World Bank has estimated India’s growth for the current fiscal at 6.8 per cent, lower than the government projection, as the economy faces headwinds of high interest rates and “heightened” uncertainty of policy reforms. Without naming India, the World Bank in its Global Economic Prospects’ report has said that South Asia’s economies were also confronted with “domestic policy paralysis and uncertainty about regulatory reforms.” The Indian government has been expecting 7-7.5 per cent GDP growth in the fiscal ending March 2012, against 8.5 per cent in the previous year.
The World Bank did not give an encouraging forecast even for the fiscal 2012-2013. It expects the GDP expansion to remain flat at 6.8 per cent in the next financial year. It would then bounce back to 8 per cent in financial year 2013-14. The economy expanded by 7.3 per cent in the first half of the fiscal. In the second quarter, growth moderated to 6.9 per cent, lowest in over two years, according to government data.