New Delhi: The Asian Development Bank (ADB) has forecast that India’s growth will slow by 7 per cent in the current financial year due to the effects of the Karona epidemic. Like the world’s leading rating agencies, ADB has revised its estimates. Earlier, it had said that India’s growth would fall by 7 per cent. But after the country’s growth slowed by 23.6 percent in the three months from April to June, almost all organizations are changing their estimates of India. The S&P Ratings Agency and Japan’s Numora also forecast that India’s growth will slow by 7 percent in the current financial year. According to ADB, although India’s growth is projected to fall by 4 per cent this year, it will accelerate in 2021-22. India will achieve a high growth rate of about 8 per cent once transport and business activities return to normal.
Yasuyuki Sawada, chief economist at ADB, said India had declared a “lockdown” to deal with the Karona epidemic, which had severely affected economic activity. He encouraged ordinary people as well to take part in solving this great task: “One of the things you and other people can do is keep up the pressure … there are going to be some difficult decisions for government”. The amount of unpaid debt for Lockdown will increase and that will further weaken the country’s financial sector. “So they can’t provide funding to help them grow,” he said. The international organization estimates that their investment in technology and infrastructure will decrease as government and private sector debt rises. The Government of India has provided assistance to the poor through the Rural Employment Guarantee Program and the Social Security Program. But with uncertainty in the country, investors are reluctant to invest in India under the current circumstances, ”ADB said. It is expected that the fiscal deficit will be completely wavered in 2020-21 as expenditure increases as the government’s revenue revenue declines.
