India is a bright spot globally: World Bank

The World Bank on Sunday said India can grow at 6.4 per cent in 2015 and accelerate further next year, but cautioned that an enduring “bias” on the basis of caste and other factors can impede prosperity.

The government, however, is well aware of this issue and the World Bank sees India as “a bright spot in an otherwise mediocre global economic outlook,” the multilateral lending agency’s president Jim Yong Kim said.

“Indian society has an enduring exclusion that is based, among other things, on caste identities. This bias can impede shared prosperity, serving as a basis for discrimination in many spheres, including in employment and other markets, as well as in public services,” he said.

Acknowledging the government’s efforts to address such issues, Mr Jim said that Prime Minister Narendra Modi has focused on programmes to promote “broad-sharing of its benefits”, in addition to action that will accelerate growth.

“Its (government’s) special allocation of a fund for entrepreneurs from among the Scheduled Castes, and its focus on fixing bottlenecks so that money earmarked for the Scheduled Tribes reaches them, are both ethically just and economically sound responses,” he added.

Speaking at the Vibrant Gujarat summit, the World Bank chief said that there is much reason for optimism among investors, entrepreneurs and CEOs thinking of doing business in Gujarat and the country as a whole. “According to our projections, its (India’s) economy is expected to grow 6.4 per cent this year and even faster in 2016, he said. He said Prime Minister Narendra Modi and his government are quickly putting in place the building blocks for even more rapid growth, streamlining the national regulatory structure, using public funds more efficiently, and promoting social inclusion.

After slowing to sub-five per cent growth in the previous two FYs, the economy expanded by 5.7 per cent and 5.3 per cent in the second and third quarter of 2015.