Due to sharp contraction within the Indian economy thanks to Covid-19 and therefore the economic lockdown,India will slip below Bangladesh in per capita gross domestic product in 2020. consistent with International fund (IMF)-World Economic Outlook (WEO), Bangladesh’s per capita GDP in dollar terms is predicted to grow 4 per cent in 2020 to $1,888. India’s per capita GDP, on the opposite hand, is predicted to say no 10.5 per cent to $1,877 – rock bottom within the last four years.
IMF’s forecast for India is worse than RBI’s projection of 9.5% contraction for the complete fiscal. it’s also gloomier than the forecast of International Bank for Reconstruction and Development which predicted a decline of 9.6% for FY21. additionally , the planet Bank also said that things in India is “worse than ever”. India’s contraction of 10.3% goes to be third sharpest fall within the world after Spain and Italy, the report said. it’ll even be the starkest decline among developing nations and emerging economies. the info accompanying the report says that in 2020, the Indian economy is about to shrink the foremost since the 1990-91 crisis. India is probably going to be the worst hit economy in South Asia after Sri Lanka , it shows.
IMF works to enhance the economies of its member countries. The IMF report, however, foresees a pointy recovery for India in 2021, which can get India before Bangladesh once more in per capita GDP.
What was the primary option provided by the Centre to States?
As per the primary option given by the centre, states are given permission to borrow Rs 1.1 lakh crore from the market. this may be serviced through the compensation cess that has been pushed beyond the originally gave nod five-year tenure that ends June 2022. Borrowing costs for states have fallen after the Federal Reserve Bank of India said it’ll buy their debt via open market operations to assist facilitate increased borrowing requirements.
Different states and different decisions
Eight states are yet to exercise any option
Opposition states will again ask the central government to require loan and compensate the states.If it doesn’t agree, it’ll show the people of the country that the central government isn’t willing to assist the states.