Indian economic growth forecast slashed: Mid-Year Economic Analysis


The Indian economy is headed for the decade's lowest growth of 5.7-5.9 per cent this fiscal, with a likelihood of its picking up going forward on the back of a confidence-inducing Budget and reforms initiatives.

In its Mid-Year Economic Analysis, which was tabled in Parliament today, the government lowered the economic growth estimate for 2012-13 to 5.7-5.9 per cent, from 7.6 per cent projected in Economic Survey in March.

Take survey: After sea of red, mutual funds are back in black. Tell us your views.

This would be the lowest growth since 2002-03, when the economy expanded by a mere 4 per cent. In the 2011-12 fiscal, the economy expanded at 9-year low of 6.5 per cent.

The challenges before the economy, the document said would be to meet revenue realisation, disinvestment target, and contain fiscal deficit at 5.3 per cent of GDP.

Briefing reporters, Chief Economic Advisor Raghuram Rajan said: "Slowdown has bottomed out. We anticipate that with the positive momentum that we see build up, we will see 6 per cent growth in second half which will take up the growth for full fiscal to 5.7-5.9 per cent". It grew by 5.4 per cent during April-September 2012-13.

He suggested a three pronged strategy – confidence inducing Budget, speeding up clearance for projects, and further steps in capital market reform -- to boost investor confidence and propel growth momentum.

The document, which was released a day before the Reserve Bank's mid-quarter review, has pitched for supportive monetary and fiscal policies to improve investor confidence.

It said there "are reasons to believe" that the slowdown has bottomed out and economy is headed towards higher growth going ahead.

Referring to inflation, it said, further moderation in price rise is likely to commence from the fourth quarter of the fiscal.

... contd.

Please read our terms of use before posting comments
TERMS OF USE: The views expressed in comments published on are those of the comment writer's alone. They do not represent the views or opinions of The Indian Express Group or its staff. Comments are automatically posted live; however, reserves the right to take it down at any time. We also reserve the right not to publish comments that are abusive, obscene, inflammatory, derogatory or defamatory.