World Bank projects Indian economy to grow 8 per cent in 2011-12

According to a World Bank report released Monday, India's economy would grow at 7.5 per cent in the 2010-11 fiscal beginning 1 April. The report says the growth would be higher at 8 per cent in the following year.

Hans Timmer, director, World Bank

Hans Timmer, director of the World Bank's development prospects group, told reporters that the projections were based on growth in the first quarter of fiscal 2009-10.

He added that India had weathered the global crisis relatively well partly due to the government's quick response in easing monetary policy and counter-cyclical fiscal policy measures that have lent support to domestic demand.

According to the Reserve Bank of India's (RBI) projection the Indian economy would register and impressive 7.5 per cent growth for the Indian economy in the current fiscal which had earlier been pegged at 6 per cent.

The economy registered a 6.1 per cent growth in the current fiscal, rising unexpectedly to 7.9 per cent as the economy surged to 6.7 per cent growth during 2008-09 and 9.1 per cent in 2007-08.

The bank's report also points out some areas of concern. It said as private consumption gained momentum after the crisis, India's import volumes were likely to expand and slated to outpace the recovery in exports.

The report projects that as macro-policy grew much less expansionary with continued fiscal consolidation, the impetus to growth stemming from public consumption was expected to moderate sharply.

''While diversification and reforms in the country's agricultural sector over recent years are likely to help cushion the negative impact of last year's poor monsoon, the resulting poor harvest is expected to lead to a lower contribution to growth of agricultural output and constrain the rebound in household consumption in 2010,'' the report said.