NEW DELHI - After facing its worst slowdown in a decade, India says its economy will pick up pace next year, growing by more than 6%.
The country’s sharp economic slowdown in the past year has led to warnings from the International Monetary Fund that India is dragging down global growth.
But an annual government survey released Friday said the worst may be behind Asia’s third largest economy. It projected India's economy would grow by 6 to 6.5% in the next fiscal year that begins in April.
The economy is expected to grow by less than five per cent this year as most sectors including exports, manufacturing and farming lose pace.
The government is expected to announce a slew of measures to boost the economy on Saturday when it presents its annual budget. The proposals could include higher spending on infrastructure and steps to revive India's ailing banking sector.
Prime Minister Narendra Modi has set an ambitious target of turning India into a $5 trillion economy by 2024 but several economists say that may be unachievable and the economic revival may not be as fast as projected.
The International Monetary Fund, which has cut global growth forecasts for 2020 in its latest report released earlier this month, has cited the sharper than expected slowdown in India as one of the reasons for the downward revision. Until just a year ago, India was the poster child among developing economies and the world’s fastest growing major economy.
For the government, a slowing economy presents a huge challenge – surveys say unemployment has been growing in the country as sectors such as automobile manufacturing cut tens of thousands of jobs. According to a recent report by the Center for Monitoring Economy, unemployment has grown to 7.7 % – the highest in several decades.