Context

India has emerged as the world’s fastest-growing major economy, projected to maintain its economic dominance for the next two fiscal years. According to the January 2025 edition of the World Bank's Global Economic Prospects (GEP) report, India’s economy is expected to grow at a steady rate of 6.7% in FY26 and FY27, significantly surpassing the global average of 2.7%. This highlights India’s economic resilience.

About the Report

The Global Economic Prospects (GEP) report is a key publication by the World Bank Group, offering insights into global economic trends and projections. It focuses on the growth trajectories and challenges of emerging markets and developing economies. Published twice a year—January and June—it serves as a vital resource for policymakers, economists, and researchers.

Key Findings of the Report

• India’s Economic Growth: India will remain the fastest-growing large economy, with a consistent 6.7% annual growth rate during FY26 and FY27.
• Sectoral Growth: India’s services sector will continue to thrive, while manufacturing is expected to strengthen, supported by government initiatives.
• Private Consumption: Stronger labor markets, increased credit access, and low inflation will drive private consumption in India.
• Investment Growth: Investment in India will remain stable, fueled by private investments, better corporate balance sheets, and favorable financing conditions.
• Global Growth Comparison: The global economy is projected to grow at 2.7%, with India outpacing this growth.
• Transformation of Emerging Markets: Emerging Market and Developing Economies (EMDEs) have transformed significantly, now contributing approximately 45% of global GDP, up from 25% at the beginning of the century.

Initiatives Driving Growth in India

• PM GatiShakti National Master Plan: Focuses on enhancing connectivity across the country through modern roads, railways, ports, and logistics.
• Startup India: Aimed at promoting innovation and entrepreneurship, this initiative provides financial support, mentorship, and tax incentives to startups.
• Production Linked Incentive (PLI) Scheme: Encourages investment in sectors like electronics, automotive, and textiles by offering financial incentives to increase production.

About the World Bank

The World Bank, founded in 1944, is a global financial institution focused on providing financial and technical assistance to developing countries, aiming to reduce poverty and foster shared prosperity. The World Bank Group consists of five institutions:

1.   International Bank for Reconstruction and Development (IBRD)

2.   International Development Association (IDA)

3.   International Finance Corporation (IFC)

4.   Multilateral Guarantee Agency (MIGA)

5.   International Centre for the Settlement of Investment Disputes (ICSID)

India is a member of the World Bank but not a member of ICSID. The World Bank is a specialized agency of the United Nations, with 189 member countries. Notable reports published by the World Bank include the Human Capital Index, the World Development Report, and the Global Economic Prospects.