GS PAPER II: Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment.

Context: The Asian Development Bank has raised its forecast for India’s growth in 2021-22 to 11%, from 8% earlier, even as it warned that failure to control the resurgence of COVID-19 cases including April’s exponential jump poses a “considerable downside risk to the recovery”.

‘Targeted containment’

• In its assessment based on end-March data, the ADB cited this year’s ‘more targeted’ containment measures compared with last year’s ‘large-scale’ national lockdown and said these would prove ‘less costly’ to the economy, which had seen a strong rebound in recent months’ economic indicators after last year’s ‘big recession’.
• India’s largest export market, will support the revival Asian Development Outlook report, projecting growth to moderate to 7% in 2022-23, after a 11% expansion this year.
• Government capex and accommodative financial policies, along with the vaccine roll-out programme this year, would also help.
• Another risk is a further tightening of global financial conditions, which would apply pressure on India’s market interest rates and therefore affect economic normalization.
• The lender sees India’s average inflation rate slowing to 5.2% this year from 6.2% last fiscal, and reverting to 4.8% (recorded in 2019-20), over the succeeding 12 months.
• Inflation is projected to moderate as good harvests and supply chain recovery contain domestic food inflation even as global food prices rise, though oil prices... may exert some inflationary pressure.

About ADB:

• The Asian Development Bank (ADB) is a regional development bank established on 19 December 1966, which is headquartered in Philippines.
• The bank admits the members of the United Nations Economic and Social Commission for Asia and the Pacific and non-regional developed countries.
• ADB now has 68 members.
• The ADB was modeled closely on the World Bank, and has a similar weighted voting system where votes are distributed in proportion with members' capital subscriptions.
• ADB releases an annual report that summarizes its operations, budget and other materials for review by the public
• ADB is an official United Nations Observer
• Japan and the United States each holds the largest proportion of shares at 15.571%. China holds 6.429%, India holds 6.317%, and Australia holds 5.773%

https://www.thehindu.com/business/Industry/adb-sees-india-grow-by-11-adds-caveat/article34425353.ece?homepage=true

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