Indian Express Editorial Summary
Editorial Topic : An Upward Tick: World Bank Raises India’s Growth Forecast
GS-3 Mains Exam : Economy
Revision Notes
Growth Estimate
- World Bank: Revised India’s growth forecast to 7% (earlier 6.6%).
- IMF: In its July update, raised its forecast to 7%.
- Asian Development Bank: Projected growth at 7%.
- RBI: Estimated slightly higher growth at 7.2%.
- Medium-term outlook: World Bank expects growth to average 6.7% (2025-27), while IMF projects 6.5% over the next few years.
Segment-wise Expectations
- Private consumption: Expected to rise due to rural income recovery. Grew 7.4% in Q1, compared to 4% last year.
- Agriculture: A good monsoon post last year’s El Niño is expected to increase farm output, lifting rural incomes and demand.
- Investment growth: Slight slowdown due to lower government capital expenditure.
Export Challenges
- India has missed out on gains from China’s declining market share in low-skill manufacturing.
- Bangladesh and Vietnam have captured the export space in apparel, leather, textiles, and footwear.
- Other beneficiaries: Poland, Germany, and France.
Underlying Problems
- High tariffs: India’s average tariff (most favoured nation) has risen over the last decade, higher than competitors.
- Unemployment: Increasing skill intensity in exports has led to a decline in export-related employment (direct and indirect).
Way Forward
- Reverse protectionism by reducing tariff and non-tariff barriers.
- Focus on more free trade agreements and deeper integration with global value chains.
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