World Bank 'very bullish' on Indian economy, calls it 'shining light' in world

The World Bank expressed strong confidence in India's economic outlook despite a slight moderation in growth, urging investors to bet on the South Asian economy.

"We are not worried about India's growth at the moment. We are very bullish about India and will remain bullish," Auguste Tano Kouame, the World Bank’s country director for India, said at the Advantage Assam 2.0 Business Summit.

Fluctuations of one percentage point in economic growth do not change the lender's positive view, he added.

"If somebody is worried about recent data, we would like to say—don't worry. India is the shining light in the world. If you are looking to invest, then come and invest here," Kouame said.

The Reserve Bank of India (RBI) has projected the country's real GDP growth for the next fiscal year at 6.7%, with steady momentum expected across quarters. It forecasts 6.7% growth in the first quarter, 7% in the second, and a moderation to 6.5% in the latter half of the year.

RBI Governor Sanjay Malhotra recently said India should aspire to exceed a 7% growth rate.

"I would like to stick my neck out and say that certainly, India can achieve a 7% and plus growth rate. We should certainly aspire for that," he said.

Fiscal discipline key to growth

An EY report said India needs to maintain a tax buoyancy ratio of 1.2-1.5 to sustain growth in the 6.5-7% range, adding that the government should focus on revenue mobilisation and raising the tax-to-GDP ratio from 12% in FY26 to 14% by FY31.

"Maintaining tax buoyancy in the 1.2-1.5 range could help the government of India achieve 6.5-7.0% GDP growth," the EY India Economy Watch report said, noting that gross tax revenue buoyancy had moderated from 1.4 in FY24 to 1.15 in FY25 and is projected to be 1.07 in FY26.

D.K. Srivastava, chief policy advisor at EY India, said the upcoming budget must balance fiscal consolidation with growth imperatives.

"For India to achieve a medium-term growth trajectory of 6.5-7.0% and realise its Viksit Bharat vision, it must ensure tax buoyancy remains in the 1.2-1.5 range," he said.

India’s economy is projected to grow between 6.3% and 6.8% in the next fiscal year. GDP growth for the current fiscal is estimated at 6.4%.