World Bank on Tuesday scaled down India's growth forecast to 6.1 per cent for the current fiscal from 7 per cent projected six months ago.
The decline in the growth forecast is largely due to the decline in agriculture sector which is expected to grow at 2 per cent during 2013-14 against the previous estimate of 2.7 per cent despite normal monsoon projection.
However, the multi-lateral funding agency said that India is regaining economic momentum and growth is expected to recover gradually to its high long-term potential.
As per the latest India Development Update of the World Bank, Indian economy would grow by 6.1 per cent in 2013-14 on account of robust domestic demand, strong savings and investment rate.
Growth projections for 2013-14 has been arrived at by taking into account present internal and external factors.
“Economic growth is likely to accelerate to over 6 per cent during the current financial year (April 2013-March 2014). Growth is expected to increase further to 6.7 per cent in 2014-2015,” said Denis Medvedev, Senior Country Economist, World Bank, India.
“Recent data point to some improvements in economic activity: inflation and trade deficit came down in recent months, while private consumption and investment growth had accelerated in the third quarter of 2012-2013,” he said.According to the Update, a twice yearly report on the Indian economy and its prospects, GDP growth during 2012-13 would be around 5 per cent, lowest in the decade.