World Bank Sees GDP Growing At 6 Per Cent

New Delhi, Sept 18: | Updated: Sep 19 2003, 05:30am hrs
The World Bank has said the economy will grow at 6 per cent this fiscal following recovery in agriculture due to good monsoon, but warned of large fiscal deficits and public debt increasing investment uncertainty.

The likely growth rate of around 6 per cent for 2003-04 incorporates a recovery in agriculture due to record rains, bank consultant Mark Baird said at a seminar on India: Sustaining Reform, Reducing Poverty organised by the WB in association with Assocham here on Thursday.

Last month, IMF had forecast a growth rate of 5.5 per cent for India during this fiscal following excellent monsoon.

Agriculture contributes 25 per cent to the GDP. Improved productivity due to good monsoon will have a positive impact on the GDP, Mr Baird said.

He pointed out that the Tenth Plan period started with slowing of growth to an estimated 4.4 per cent in 2002-03. It was, to an extent, due to external factors on agricultural output, including the impact of floods and drought. Some recovery in growth is expected in 2003-04 following good rains and improved external environment, Mr Baird said.

However, he expressed concern over the fiscal deficit, which was 5.9 per cent last fiscal, exceeding the target of 5.3 per cent.

He said the sooner the roadmap for reforms was put in place, the more manageable would be adjustment path for faster growth, poverty reduction and achieving the 8 per cent growth rate during the Tenth Plan.