Indian economy to grow at 6.1% in FY14: World Bank

Decline in growth forecast largely due to the decline in agriculture sector

World Bank today scaled down India's growth forecast to 6.1% for the current fiscal from 7% projected six months ago.

The decline in the growth forecast is largely due to the decline in agriculture sector which is expected to grow at 2% during 2013-14 against the previous estimate of 2.7% despite normal monsoon projection.

However, the multi-lateral funding agency said that India is regaining economic momentum and growth is expected to recover gradually to its high long-term potential.

As per the latest India Development Update of the World Bank, Indian economy would grow by 6.1% in 2013-14 on account of robust domestic demand, strong savings and investment rate.

Growth projections for 2013-14 has been arrived at by taking into account present internal and external factors.

"Economic growth is likely to accelerate to over 6% during the current financial year (April 2013-March 2014). Growth is expected to increase further to 6.7% in 2014-2015," said Denis Medvedev, Senior Country Economist, World Bank, India.

"Recent data point to some improvements in economic activity: inflation and trade deficit came down in recent months, while private consumption and investment growth had accelerated in the third quarter of 2012-2013," he said.

According to the Update, a twice yearly report on the Indian economy and its prospects, GDP growth during 2012-13 would be around 5%, lowest in the decade.

As per the International Monetary Fund (IMF) report released yesterday India's GDP is likely to improve to 5.7% during year ending December 2013 and further to 6.2% a year after.