ADB projects 6% growth for India

The Asian Development Bank (ADB) has projected 6 per cent Gross Domestic Product (GDP) growth rate for India for 2003 despite Iraq war and f...

The Asian Development Bank (ADB) has projected 6 per cent Gross Domestic Product (GDP) growth rate for India for 2003 despite Iraq war and fallout of SARS.

India will be outpacing the growth of many of the other countries in the Asian region, barring China, which is expected to grow by 7.3 per cent, said ADB’s Asian Development Outlook 2003. “Assuming normal monsoon conditions, the Indian economy is projected to grow by six per cent in 2003 with agriculture and services growing at average rates,” said ADB assistant Chief economist Jean-Pierre A Verbiest while releasing the ADB Outlook here on Monday.

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According to ADB estimates, industry is expected to grow by 6.1 and services sector by 7.1. As far as agriculture sector is concerned, the ADB has assumed that it would record normal growth as opposed to a decline of 3.1 per cent in the last fiscal. The report said that though SARS is likely to have a “substantial negative impact” in the Asian region, India would grow by 6.0 per cent in 2003 and 6.3 per cent in 2004, which was higher than 4.4 per cent growth in 2002.

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China’s growth is expected to be higher at 7.3 per cent in 2003, but it will be much lower than the 8.0 per cent in 2002. This is apparently due to SARS. Growth would, however, pick up to 7.6 per cent in 2004, the Outlook said.

The ADB also said India, which accounts for three-fourth of the South Asian economy, is expected to grow by 6.0 per cent in 2003, again marginally higher than the sub-region’s average of 5.7 per cent. It added that India’s GDP growth of 6.3 per cent in 2004 would also be marginally higher than 6.1 per cent for the South asian region. Verbiest said that in the medium to long term, sustained high growth would require high investment in capacity creation for the infrastructure development as well as technology development for improvement in competitiveness, removing rigidities in labour laws and strong fiscal consolidation.