India's GDP expected to expand 7.5 per cent in 2019-20: World Bank
Washington: India's GDP growth is expected to accelerate moderately to 7.5 per cent in Fiscal Year 19-20, driven by continued investment strengthening, particularly private-improved export performance and resilient consumption, the World Bank has said.
The real GDP growth is estimated at 7.2 per cent in FY18/19, the World Bank said in its latest report on South Asia on Sunday ahead of the spring meeting of the World Bank and the International Monetary Fund.
Data for the first three quarters suggest that growth has been broad-based. Industrial growth accelerated to 7.9 per cent, making up for a deceleration in services.
Meanwhile, agriculture growth was robust at four per cent.
On the demand side, domestic consumption remained the primary growth driver, but gross fixed capital formation and exports both made growing contributions. Over the last quarter, growth is expected to remain balanced across sectors, the report said.
Inflation dynamics have been subdued over most of FY18/19, the report said.
The World Bank said India's GDP growth is expected to accelerate moderately to 7.5 per cent in FY19/20, driven by continued investment strengthening-particularly private- improved export performance, and resilient consumption.
With robust growth, and food prices poised to recover, inflation is expected to converge toward four per cent, it said, adding that both the current account and the fiscal deficit are expected to narrow.
"On the external front, improvements in India's export performance and low oil prices should bring about a reduction in the current account deficit to 1.9 per cent of GDP," it said.
"On the internal front, the consolidated fiscal deficit is projected to decline, albeit slowly (to 6.2 and 6.0 per cent of GDP in FY19/20 and FY20/21 respectively). As the center's deficit is budgeted to remain unchanged at 3.4 per cent of GDP in FY19/20, the burden of adjustment will rest on the states, the World Bank said.
A sustained decline in food prices since July 2018, subsequently complemented by the softening of oil prices and concomitant appreciation of the rupee, has led to a steady decline in inflation, it noted.
Observing that headline inflation stood at 2.6 per cent in February 2019, and the average for FY18/19 so far at 3.5 per cent, well below the RBI's target-midpoint of four percent, the report said that as a result, the RBI reduced the policy rate by 25 basis points (to 6.25 percent) in February 2019.
However, the report said that the current account deficit widened in FY18-19.
India's external position worsened significantly in the first half of FY18-19, as large portfolio outflows were triggered by US monetary policy and fears of contagion from stress in some emerging market economies. The nominal exchange rate depreciated, and foreign reserves declined by over eight percent over January to October 2018.
However, since then, the decline in oil prices and the United States Fed signaling a slower pace of normalisation than initially anticipated led to a partial reversal.
Portfolio outflows have reversed, and the rupee has appreciated by about four percent vis-a-vis the USD since October 2018.
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Lok Sabha extends tenure of parliamentary panel on Waqf bill
New Delhi (PTI): The Lok Sabha on Thursday adopted a resolution to extend the tenure of the Joint Committee on the Waqf (Amendment) Bill till the last day of the Budget session of Parliament next year.
Committee Chairman and BJP leader Jagdambika Pal moved the resolution in the Lok Sabha, which approved it with a voice vote.
The parliamentary panel’s meetings have become a virtual battleground between the opposition and the ruling party members, who have been vociferously debating the changes to the Waqf Bill proposed by the government.
On Wednesday, the opposition members of the committee staged a walkout and slammed Pal for asserting that the panel's draft report was ready.
Pal and the BJP members of the committee then reached out to opposition members and indicated their willingness to press for an extension of the committee's deadline of November 29 to submit its report to the Lok Sabha.
The Lok Sabha had constituted the committee on August 8 and asked to submit its report on the last day of the first week of the Winter session, which is on Friday.
Following the last meeting of the committee on November 21, Pal had said its draft report is ready. He indicated that the committee's consultation with stakeholders is over and its members will now discuss the report and suggest changes, if any, before it is adopted.
The opposition members took strong exception to this stand in Wednesday's meeting and soon stormed out. They claimed that Birla had assured them that its tenure would be extended.
Opposition parties have stridently criticised the amendments proposed by the bill in the existing Waqf Act, alleging they violate the religious rights of Muslims.
The ruling BJP has asserted that the amendments will bring transparency in the functioning of the waqf boards and make them accountable.
