Growth in Q3 has slowed to sub-5%
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The Indian economy is likely to have slowed to just below 5 per cent growth in the third quarter of the fiscal, even though the Economic Survey expressed hope of a revival in growth to 6.1 and 6.7 per cent in 2013-14.
"The picture is not very different from the advance estimates. Industrial production figures for December is the only new data set used from the third quarter GDP estimate that was not available for the advance estimates," a senior official said.
The Central Statistics Office (CSO) is scheduled to release official data on gross domestic product for the October to December quarter on Thursday. The economy registered 5.4 per cent growth in the first half of the fiscal and the CSO in its advance estimates has pegged growth at 5 per cent for 2012-13.
"Simple mathematics shows that it is likely to be less than 5 per cent in the third quarter," the official said. But the Economic Survey 2012-13, tabled by finance minister P Chidambaram in Parliament on Wednesday painted a much rosier picture of the economy and said the domestic downturn is over even as external risks have diminished.
Further, inflation is likely to soften to 6.2–6.5 per cent by March 2013, giving the Reserve Bank of India much needed space for an accommodative monetary policy.
"While the current environment is difficult, the future holds promise," the Survey said, cautioning against downside risks including a high oil import bill and low risk tolerance by global investors. For 2012-13, the Survey had projected a growth rate of 7.6 per cent and it held the CSO projection of 5 per cent growth in the current fiscal.
"These are difficult times but India has navigated such times before and with good policies it will come through stronger," said chief economic adviser Raghuram G Rajan who is also the lead author of the Survey, at a press conference.
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