The World Bank recently published a report titled “South Asia Economic Focus: Expanding Opportunities: Toward Inclusive Growth”, which provides an economic outlook for India, Sri Lanka, and Pakistan.
Economic Outlook for India
According to the World Bank’s report, India’s growth rate has been revised downwards to 6.3% for FY 2023-24. High borrowing costs and slower income growth have been cited as the main reasons for this downgrading. The female labour participation rate, along with the size and productivity of the informal sector, are key issues in India. Conversely, the services and construction sectors are experiencing rapid growth, backed by robust investment growth and high business confidence. The report anticipates that India’s growth rate will improve to 6.4% in FY 2024-25, marking an increase of 0.3% points from previous predictions.
Economic Outlook for Sri Lanka and Pakistan
The economic forecast for Sri Lanka and Pakistan is less promising. Sri Lanka is predicted to undergo a contraction of -4.3% in 2023 and is currently negotiating a USD 3 billion loan from the International Monetary Fund (IMF). Meanwhile, Pakistan’s predicted growth rate for the year ending June 30, 2023, is a modest 0.4%.
World Bank-Supported Projects in India
The World Bank is supporting numerous projects in India, including the Energy Efficiency Scale-up Program, which aims to increase energy efficiency in residential and public sectors, strengthen the institutional capacity of Energy Efficiency Services Limited (EESL), and improve its access to commercial financing. Another significant initiative is the Pradhan Mantri Gram Sadak Yojana, which seeks to connect rural communities through all-weather roads. The Eastern Dedicated Freight Corridor Project, Innovate in India for Inclusiveness, and National Dairy Support Project are other significant initiatives backed by the World Bank in India.
About the World Bank
The World Bank was established in 1944 as the International Bank for Reconstruction and Development (IBRD), alongside the IMF. It later became known as the World Bank and is a key part of the United Nations’ specialized agencies. It’s made up of 189 member countries, including India, and operates five developmental institutions: IBRD, International Development Association (IDA), International Finance Corporation (IFC), Multilateral Guarantee Agency (MIGA), and International Centre for the Settlement of Investment Disputes (ICSID). Notably, India is not part of the ICSID.
Reports and Indices by the World Bank
The Ease of Doing Business Index, the Human Capital Index, and the World Development Report are among the major reports and indices released by the World Bank. However, it is noteworthy that the Ease of Doing Business report has been discontinued.
Reference to Previous Year Questions in UPSC Civil Services Examination
Previous questions in the UPSC Civil Services Examination have included topics related to the World Bank, such as the “Ease of Doing Business Index” and ‘IFC Masala Bonds’.
