Growth dips to 6.2%; WB says 7.8% must to achieve 2047 goal – The Tribune-OxBig News Network

India’s economic growth rate decelerated to 6.2 per cent in the October-December quarter this fiscal as a consequence of poor performance by mining, manufacturing and all other sectors, with the exception of agriculture.

This came as the World Bank report noted that India would need to grow by 7.8 per cent on average over the next 22 years to achieve the country’s aspirations of reaching high-income status by 2047.

The 6.2 per cent gross domestic product (GDP) growth rate was higher than 5.6 per cent expansion in the July-September 2024 period, but lower than the Reserve Bank of India’s estimate of 6.8 per cent for the period. The GDP growth was 9.5 per cent in the October-December 2023 quarter, according to the data released by the National Statistical Office (NSO).

For the full 2024-25 fiscal (April 2024 to March 2025), the government pegged the GDP growth at 6.5 per cent, marginally higher than its initial estimate of 6.4 per cent but below the revised growth rate of 9.2 per cent for 2023-24.

The growth in the current fiscal and below 7 per cent expected in the next would keep India the fastest-expanding major economy.

In its report ‘Becoming a High-Income Economy in a Generation’ released today, the World Bank, however, said the 7.8 per cent growth target was possible.

Recognising India’s fast pace of growth averaging 6.3 per cent between 2000 and 2024, the report noted that India’s past achievements provide the foundation for its future ambitions. Getting there, however, would require reforms and their implementation will be as ambitious as the target itself. “Lessons from countries such as Chile, Korea and Poland show how they have successfully made the transition from middle-income to high-income countries by deepening their integration into the global economy,” said Auguste Tano Kouame, World Bank country director.

The report evaluated various scenarios for India’s growth trajectory over the next 22 years. To reach the high-income status in a generation, India needed to achieve faster and inclusive growth across states; increase total investment from current 33.5 per cent of the GDP to 40 per cent (both in real terms) by 2035; increase overall labour force participation from 56.4 per cent to above 65 per cent.

“India can take advantage of its demographic dividend by investing in human capital, enabling conditions for more jobs and raising female labour force participation rates from 35.6 per cent to 50 per cent by 2047,” said Emilia Skrok and Rangeet Ghosh, co-authors of the report.

In the past three fiscal years, India had accelerated its average growth rate to 7.2 per cent. In order to maintain the acceleration and attain an average growth rate of 7.8 per cent over the next two decades, the World Bank’s Country Economic Memorandum recommended critical areas for policy action — increasing investment; fostering an environment to create more jobs; promoting technology adoption; and enabling states to grow faster.

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