The World Bank on Monday said it expects the Indian economy to grow by 8 percent this fiscal year but asked the government to open up more sectors for foreign direct investment (FDI), encourage private sector participation and improve infrastructure, reports the World Bank press review Tuesday.
– The overall economic situation is very positive. There is a very good chance of the economy to grow by 8 percent this fiscal year, World Bank Vice-President for South Asia, Praful Patel said on the sidelines of a micro-finance conference in New Delhi.
Indias GDP grew slightly higher than 8 percent in the first half of 2005-2006, with a booming manufacturing and services sector.
Citing the success stories of East Asian “tiger” economies, Patel said those countries were like India some decades ago but they carried out rapid infrastructure development and India should do the same. In this context, he said the government should encourage public-private partnerships for infrastructure development.
To attract more FDI and private participation, he said the government should allow higher user charges and not reverse its policies for private players. The government should also make efforts to improve productivity, build rural infrastructure and step up public investment in agriculture, Patel said.
The Statesman (India) writes that identifying agriculture as a major activity in Indias economy, Patel indicated support to get back into this sector. The World Bank program in agriculture is very limited, Patel said.
The share of agriculture in Indias economy had shrunk, not because of poor performance, but because the other sectors, including manufacturing and services were booming.
– We are ready to support India in the agriculture sector, Patel said referring to the vast majority of poor people living in rural India. He said the Banks activities had shifted to urban development and infrastructure in recent years, but it was willing to step up its activity in the farm sector.
Indian Prime Minister Manmohan Singh said last week that the economy was expected to expand by 7,5 percent during the financial year and could expand by 10 percent in three years if the country made a “quantum leap” in farming, infrastructure and savings rates.
Referring to the Prime Ministers comments, Patel said 10 percent growth was very much achievable. The government had earlier forecast that the economy would expand by 7,0 to 7,5 percent this fiscal year.
Kilde: www.worldbank.org
