Low agricultural demand, poor export, import scenarios "weak spots" in India's growth outlook: World Bank

By A Representative
Despite the prediction that the Indian economy would grow by 7.7 per cent next year (click HERE), the World Bank in its latest report, “South Asia Economic Focus Spring 2016: Fading Tailwinds” has regretted that “private consumption growth” in the country has been driven “by non-agricultural (largely urban) households, as rural areas have been under stress.”
Blaming it on what it calls “two sub-par monsoons and declining underground water levels in North India that depressed agricultural output”, the report reasons how the purchasing power of the rural areas in the country has just failed to pick up.
It says, “Increases in minimum support prices have steadily decelerated, and construction sector growth moderated. On the other hand, reliance on the rural employment guarantee scheme (MNREGA) has increased, reflecting latent demand for employment opportunities in rural areas.”

Claiming that “economic activity” in India “is expected to accelerate gradually”, the report believes, much would depend on “a rebound in agriculture on the expectation of a normal monsoon in 2016.”
Pointing out that the private consumption growth, which is largely an urban phenomenon, might accelerate, and the “stimulus” would be provided by “civil service pay revisions”, with the Central seventh pay commission recommending a big hike, the report believes, if this happens, there would be a “broad-based consumption growth in financial year 2017”, offsetting “continued weakness in exports and private investment.”
“Overall, India’s real GDP growth for FY2015 is estimated at 7.4 percent”, the World Bank says, adding, “A continuation of this solid performance requires strong private investment, on the back of an expected push in infrastructure spending, an improved investment climate, and less leveraged corporate and financial balance sheets.”

The report notes, while the “fixed investments accelerated from average 4.1 percent in FY13-FY14 to 5.2 percent during the first nine months of FY15-16”, “recent gains were largely due to a revival in public investment as private investment remains weak.”
It particularly emphasizes that “exports contracted (-6.5 percent y/y in the first three quarters of financial year 2016) due to the slowdown in emerging market growth and India’s declining global market share of exports.”
At the same time, it says, “Domestic demand provided little lift to imports, which contracted by 6.4 percent year-on-year during April-December”, predicting, “In later years, growth will be underpinned by private investments, which will be ‘crowded-in’ by the push to accelerate infrastructure spending, a better investment climate, and less leveraged corporate and financial balance sheets.”

While pointing out that “restarting private investments will be critical for sustained rapid growth”, the report believes, “private investment growth continues to face several impediments in the form of excess global capacity, corporate debt overhang and stresses in the financial sector, in addition to regulatory and policy challenges.”
“In the absence of investments and resulting expansion of production capacity, not only faster growth may not materialize, but inflationary pressures could build up in the medium term”, the report says.
It adds, “Realizing the meaningful and sustainable pick-up in investments requires effective implementation of reforms along many fronts: from infrastructure investments, to cleaning up banks’ balance sheets and building ‘institutional capital,’ which are the policies and institutions that enable private investments – e.g. goods and services tax (GST), land acquisition, and insolvency.”

---

Read full report HERE

Comments

Modi’s Israel visit strengthened Pakistan’s hand in US–Iran truce: Ex-Indian diplomat

By Jag Jivan M. K. Bhadrakumar , a career diplomat with three decades of service in postings across the former Soviet Union, Pakistan, Iran, Afghanistan, South Korea, Sri Lanka, Germany, and Turkey, has warned that the current truce in the US–Iran war is “fragile and ridden with contradictions.” Writing in his blog India Punchline , Bhadrakumar argues that while Pakistan has emerged as a surprising broker of dialogue, the durability of the ceasefire remains uncertain.

Incarceration of Prof Saibaba 'revives' the question: What is crime, who is criminal?

By Kunal Pant* In 2016, a Supreme Court Judge asked the state of Maharashtra, “Do you want to extract a pound of flesh?” The statement was directed against the state for contesting the bail plea of Delhi University Professor GN Saibaba. Saibaba was arrested in 2014, a justification for which was to prevent him from committing what the police called “anti-national activities.”

Why Indo-Pak relations have been on 'knife’s edge' , hostilities may remain for long

By Utkarsh Bajpai* The past few decades have seen strides being made in all aspects of life – from sticks and stones to weaponry. The extreme case of this phenomenon has been nuclear weapons. The menace caused by nuclear weapons in the past is unforgettable. Images of Hiroshima and Nagasaki from 1945 come to mind, after the United States dropped two atomic bombs on the cities.

Manufacturing, services: India's low-skill, middle-skill labour remains underemployed

By Francis Kuriakose* The Indian economy was in a state of deceleration well before Covid-19 made its impact in early 2020. This can be inferred from the declining trends of four important macroeconomic variables that indicate the health of the economy in the last quarter of 2019.

Food security? Gujarat govt puts more than 5 lakh ration cards in the 'silent' category

By Pankti Jog* A new statistical report uploaded by the Gujarat government on the national food security portal shows that ensuring food security for the marginalized community is still not a priority of the state. The statistical report, uploaded on December 24, highlights many weaknesses in implementing the National Food Security Act (NFSA) in state.

The soundtrack of resistance: How 'Sada Sada Ya Nabi' is fueling the Iran war

By Syed Ali Mujtaba* The Persian track “ Sada Sada Ya Nabi ye ” by Hossein Sotoodeh has taken the world by storm. This viral media has cut across linguistic barriers to achieve cult status, reaching over 10 million views. The electrifying music and passionate rendition by the Iranian singer have resonated across the globe, particularly as the high-intensity military conflict involving Iran entered its second month in March 2026.

Lata Mangeshkar, a Dalit from Devdasi family, 'refused to sing a song' about Ambedkar

By Pramod Ranjan* An artist is known and respected for her art. But she is equally, or even more so known and respected for her social concerns. An artist's social concerns or in other words, her worldview, give a direction and purpose to her art. History remembers only such artists whose social concerns are deep, reasoned and of durable importance. Lata Mangeshkar (28 September 1929 – 6 February 2022) was a celebrated playback singer of the Hindi film industry. She was the uncrowned queen of Indian music for over seven decades. Her popularity was unmatched. Her songs were heard and admired not only in India but also in Pakistan, Bangladesh and many other South Asian countries. In this article, we will focus on her social concerns. Lata lived for 92 long years. Music ran in her blood. Her father also belonged to the world of music. Her two sisters, Asha Bhonsle and Usha Mangeshkar, are well-known singers. Lata might have been born in Indore but the blood of a famous Devdasi family...

'Batteries now cheap enough for solar to meet India's 90% demand': Expert quotes Ember study

By A Representative Shankar Sharma, Power & Climate Policy Analyst, has urged India’s top policymakers to reconsider the financial and ecological implications of the country’s energy transition strategy in light of recent global developments. In a letter dated April 10, 2026, addressed to the Union Ministers of Finance, Power, New & Renewable Energy, Environment, Forest & Climate Change, and the Vice Chair of NITI Aayog, with a copy to the Prime Minister, Sharma highlighted concerns over India’s ambitious plans for coal gasification and the Prototype Fast Breeder Reactor (PFBR).

Health Day ads spark row as NAPi targets Britannia campaign, criticizes celebrity endorsement

By A Representative The advocacy group Nutrition Advocacy in Public Interest (NAPi) has raised concerns over what it describes as misleading advertising of ultra-processed food products (UPFs), particularly those high in sugar, fat and salt, calling for stricter regulations and an end to such promotions across media platforms.

Search This Blog