ADB cuts India’s GDP growth forecast to 6.5% for FY20

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News:Asian Development Bank has released an update to its flagship Asian Development Outlook,2019.

Facts:

Key takeaways from the report:

  • The report has slashed India’s growth forecast for fiscal 2019-20 to 6.5% from 7% projected in July,2019.
  • The growth was lowered due to slowdown in consumption and investment activities that hit manufacturing and service sectors.
  • ADB has said that proactive policy interventions along with a recovery in domestic demand and investments will likely see the economy pick up to 7.2% in 2020-21.
  • The report has also said that the measures such as (a)corporate tax cuts (b)direct income support for small farmers (c)tax relief for low-income taxpayers and (d)reduced loan interest rates will boost the growth.
  • Further,the foreign direct investment could get a boost as trade tensions between the United States and China may push some businesses to move part of their operations to India.
  • However, the ADB cautioned that risks remain tilted to the downside due to the weak global economy and slowdown in the consumption on domestic front.

Additional information:

About Asian Development Bank(ADB):

  • The Asian Development Bank (ADB) is a regional development bank established on 19 December 1966.
  • ADB is headquartered in Manila, Philippines.It aims to promote social and economic development in Asia.
  • It assists its members and partners by providing loans, technical assistance, grants and equity investments to promote social and economic development.
  • ADB has 67 members, of which 48 are from within Asia and the Pacific and 19 outside. 
  • Japan and US holds the largest proportion of shares in ADB followed by China, India and Australia. ADB is also an official United Nations Observer.