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Project Detail:
India’s economy will slow down, coming off a strong recovery in FY21/22 (April 2021–March 2022). The spillovers from the Russia-Ukraine war and the global monetary policy tightening cycle are expected to weigh on India’s economic outlook: elevated inflation on the back of higher prices of key commodities, heightened global uncertainty, and rising borrowing costs will affect domestic demand, while slowing global growth will dampen India’s export growth. The growth in FY22/23 will slow to 6.9 percent from 8.7 percent in FY21/22.1 Domestic demand is expected to remain on a moderate recovery path, despite external headwinds. The Government’s strong capital expenditure (CAPEX) program will support investment, while private consumption will benefit from consumer spending in high- and middleincome groups. Net exports will continue to drag growth. The rising merchandise trade deficit will push the current account deficit to 3.2 percent of gross domestic product (GDP) in FY22/23. Due to recovering demand and elevated food and oil prices, headline inflation is expected to stay above the Reserve Bank of India’s tolerance range but should gradually ease to 5 percent next year.2 The Government’s gradual fiscal consolidation efforts will be bolstered by strong revenue performance. Goods and Services Tax (GST) collections continue to be strong, having crossed the INR 1 trillion mark every month since July 2021, reaching as high as INR 1.67 trillion in April 2022.
Although India has made remarkable progress in reducing extreme poverty over the past two decades, the COVID-19 pandemic has slowed progress and poses risks to welfare. Before the pandemic, the share of the population living below US$2.15 per person per day (2017 purchasing power partiy) is estimated to have fallen from 22.5 in 2011 to 10 percent 2019.3 This was accompanied by a sharp decline in the incidence of multidimensional poverty, from 27.7 percent in 2005/06 to 16.4 percent in 2019/21.4 However, the pace of poverty reduction has slowed in recent years, with key welfare indicators being slow to improve.5 More than 40 percent of India’s population lived below the lower-middle-income poverty line even before the pandemic.6 Inequality in consumption has remained stable, with a Gini index of around 35 over the past two decades. Child malnutrition has remained high, with 35.5 percent of children
under the age of 5 years being stunted and 67 percent of children ages 6–59 months being anemic in 2019–21.7 Despite a substantial social protection response from the Government of India (GoI), the COVID-19 pandemic has likely reversed recent welfare gains, exposed vulnerabilities in the labor market, and posed new risks to welfare. Urban unemployment has increased, with an increasing share of selfemployed and casual wage workers, suggesting an incomplete and uneven recovery from the pandemic.
Karnataka is an economic powerhouse that is facing serious water challenges. According to the 2011 census, Karnataka’s population is 61 million, of which around 60 percent lives in rural areas. The state’s GDP per capita is approximately US$3,000 compared to US$1,900 for India. Karnataka is India’s sixth largest state by area, of which 77 percent is arid or semiarid, making it the second most droughtprone state in India.9 The state contains seven river basins and has high rainfall diversity with the western ghats receiving nearly 4,000 mm rain annually compared to less than 500 mm in the eastern districts, and an overall decline in annual rainfall is predicted for the south-western and north-eastern regions of the state (2021–50). Karnataka is expected to face increased water challenges due to climate change. The state is vulnerable to climate-change-related rainfall variability, leading to droughts and floods, which contribute to groundwater depletion and deteriorating water quality. Almost 60 percent of the state experienced drought conditions of varying severity between 2001 and 2020, and 23 of the 31 districts face acute water scarcity. These water challenges need to be tackled if Karnataka is to deliver safe and reliable water supply to all citizens and make its economy less vulnerable to water stress.
Total Operation Cost 2,840.40 USD Millon
Note: Please Download Project Document attached to this Project for more information.
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