Rate hike may hit India growth: World Bank

The World Bank said on Wednesday rise in interest rates and oil prices is likely to slow down India's growth for the next few years.

"Rise in interest rates will affect very much India's growth for the next few years," World Bank Country Director Michael F Carter said in New Delhi.

High oil prices are likely to affect the global growth as well as the Indian economy. However, he said, internal factors may help India to some extent to offset the negative impact of interest rates and oil prices.

High fiscal deficit is likely to inhibit long term growth and the government has taken the right initiative of gradually reducing it, Carter said. 

India may get $2 from July: The World Bank may extend over $2 billion in the fiscal starting this July to India and is likely to resume funding to the health projects, postponed on corruption allegations.

"World Bank lent $1.6 billion last fiscal (July-June) and the lending to India this fiscal is likely to be well above $2 billion," Carter said in New Delhi.

"There has been some progress and discussions are on for resumption of lending to three health projects, held up on corruption charges," he said.

The World Bank is likely to make an announcement in this regard soon.

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