Tag: WorldBank

The World Bank Group has approved $890 million (around ₹7,400 crore) to support India’s PM Surya Ghar: Muft Bijli Yojana, giving a major boost to the country’s efforts to expand rooftop solar power and accelerate the transition to clean energy.

The funding package is expected to help millions of households install rooftop solar systems while strengthening the infrastructure needed to support distributed renewable energy across the country. It will also improve access to affordable electricity, reduce dependence on conventional power sources and contribute to India’s climate goals.

Launched by the Centre earlier this year, the PM Surya Ghar scheme aims to provide rooftop solar installations to one crore households, enabling families to generate their own electricity and lower their monthly power bills. Eligible households receive financial assistance to install solar panels, with many expected to benefit from free or significantly reduced electricity consumption.

According to the World Bank, the programme has the potential to transform India’s residential energy sector by encouraging clean power generation at the household level. The initiative is also expected to create large-scale employment opportunities in manufacturing, installation, maintenance and other solar-related services.

Apart from supporting rooftop installations, the funding will help strengthen power distribution systems, improve grid integration and enhance the capacity of financial institutions involved in financing rooftop solar projects. These measures are expected to make the programme more efficient and ensure faster adoption across urban and rural areas.

Officials said the investment reflects growing international confidence in India’s renewable energy ambitions. The country has set ambitious targets to expand non-fossil fuel energy capacity and achieve net-zero emissions by 2070, with rooftop solar expected to play a key role in meeting future electricity demand sustainably.

The World Bank also highlighted the programme’s broader social benefits, noting that wider adoption of rooftop solar can reduce household energy costs, improve energy security and lower carbon emissions. Increased participation by women-led households, small businesses and local entrepreneurs is also expected to generate inclusive economic growth.

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The World Bank has increased India’s growth forecast to 6.6% for the current financial year, up from its earlier estimate of 6.3%.

The revision shows confidence in India’s economy, which continues to perform well compared to other major countries. The growth is mainly being driven by strong demand within the country, including higher spending by consumers and continued government investment.

India remains one of the fastest-growing large economies in the world. Better business activity, stable policies, and ongoing infrastructure development are helping support this growth.

However, the World Bank has also warned about possible risks. Global tensions, especially in West Asia, could affect oil prices. Since India imports a large amount of oil, higher prices may increase costs and put pressure on the economy.

Inflation is another concern, as rising food and energy prices could impact household spending. Global uncertainty may also affect trade and investment.

Despite these challenges, India is in a relatively strong position. A stable banking system, good foreign exchange reserves, and steady policies are expected to help the country handle external pressures.

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The World Bank has projected that India’s economy will grow by 7.2 per cent in the fiscal year 2025‑26, keeping the country among the fastest-growing major economies in the world. This forecast, detailed in the Bank’s latest Global Economic Prospects report, highlights robust domestic demand and resilient economic activity as the main drivers of growth.

The report notes that private consumption is rising steadily, supported by higher rural household incomes and the positive effects of previous tax reforms. These factors, combined with strong performance in the services and merchandise export sectors, are helping India maintain economic momentum even amid global challenges.

The World Bank also pointed out that India’s growth is occurring despite external pressures such as trade tensions, slowing global growth, and higher US import tariffs, all of which have affected emerging markets. However, India’s strong internal demand and policy measures have cushioned the impact of these global headwinds.

Looking ahead, the Bank expects India’s growth to moderate to 6.5 per cent in FY2026‑27, before gradually rising to 6.6 per cent in FY2027‑28. This slowdown is attributed to a projected easing of domestic demand and global economic uncertainties, but overall, India’s economy is expected to remain resilient due to its diversified growth drivers and strong fundamentals.

The report emphasizes that continued investments in infrastructure, digital technology, and human capital, along with effective policy measures, will be key to sustaining growth over the medium term. India’s performance contrasts with other emerging economies, many of which are struggling with slower growth, inflationary pressures, and declining exports.

Overall, the World Bank’s forecast reflects optimism about India’s ability to maintain high growth rates, driven by domestic consumption, export resilience, and structural reforms. Policymakers are encouraged to continue focusing on inclusive growth, employment generation, and reforms to support long-term economic stability.

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