Despite quarterly fluctuations in GDP growth numbers, India’s average growth rate over the last three decades has been remarkable. The World Bank in its half-yearly India Development Report said that India’s GDP growth deceleration below 7% in the last four quarters was an aberration due to temporary disruptions caused by demonetisation and the GST, but it has bottomed out and should revert to the trend growth rate of about 7.5%.
The World Bank report also highlighted that despite fluctuations in the GDP growth, India’s long-term trend shows a stable, resilient and diverse economic growth, benefitted by the combined effect of reforms undertaken in the 1990s and early 2000s.
Here are 10 numbers from World Bank’s India Development report:
7.3% in FY19; 7.5% in FY20
According to World Bank’s projection, India’s economy will grow at 7.3% in the fiscal year 2018-19 and 7.5% in the fiscal year 2019-2020. The Indian economy is likely to recover from the impact of demonetisation and the GST, and growth should revert slowly to a level consistent with its proximate factors — that is, to about 7.5% a year.
8% growth + 30 years
If Indian economy grows at 8% for next 30 years, it can finally join the coveted list of middle-income countries. It would raise the income of at least half of India’s population to sustain consumption expenditure of Rs 600 a day based on the purchasing power parity of the global middle class.
According to World Bank, India’s per capita income could touch Rs 86,689, or $3.7 a day in current fiscal 2017-2018.
$20 billion to $25 billion
The World Bank plans to lend $20 billion to $25 billion in the next five years for the investment in infrastructure, human resources and natural resources management.
600% and 300 million
India’s financial development also extends to individuals, as it has experienced a significant increase in bank account coverage in recent years: the number of basic savings bank deposit accounts has increased by more than 600 percent between 2010 and 2017, driven in large part by the Pradhan Mantri Jan-Dhan Yojana Scheme which alone has led to the opening of more than 300 million bank accounts since its inception.
Public consumption grew at an average rate of 21 percent during the five quarters since the start of 2016-17. However, the contribution of public expenditure started to fade as the implementation of the 7th pay commission recommendations neared completion.
Rs 84.5 billion
The government announced export support policy, the government announced an annual package to the tune of INR 84.5 bn. to provide export incentives for the labour-intensive manufacturing sectors. The government also announced an increase in import duties for electronics, raising duties from 10 to 15 percent on items such as mobile phones.
Sensex had crossed the highest ever level of over 36,000 in January 2018. While some commentators have interpreted it as a sign of the underlying economic strength of the Indian economy, others have indicated that this may be more a reflection of similar movements in global equity prices.
Less than 1%
Property tax, the most significant avenue for collecting direct taxes, remains underexploited at less than 1% of GDP due to narrow coverage, low collection efficiency, and lack of indexation of property values.
India has added roughly $100 billion of foreign reserves between 2012-13 through February 2018. The stock of reserves was at an all-time high of $421 billion in January 2018.