Reforms can give a boost to Indian economy: World Bank

India's potential growth could be bolstered with a faster implementation of already existing ambitious reformS agenda, a recent World Bank report stated.

The report, titled “Falling Long-Term Growth Prospects: Trends, Expectations, and Policies,” offers the first comprehensive assessment of long-term potential output growth rates in the aftermath of the Covid-19 pandemic and the Russian invasion of Ukraine. These rates can be thought of as the global economy’s ‘speed limit’, it said.

The report said addressing the aftermath of financial sector distress in India could unlock significant growth. “India has a less developed financial system than many of its peers, with a heavy state presence. To improve the sector’s efficiency and depth, reforms could be undertaken to further rationalise the role of public sector banks, ensure a level playing field in the banking sector, and promote the development of capital markets,” it said.

The report highlighted India’s recent shift in focus of government spending toward infrastructure investment, consolidating labour regulations, privatising underperforming state-owned assets, and modernising and integrating the logistics sector.