India to grow at 5% in the financial year 2013: Government

07 February, 2013

Indian GDP will grow at the rate of 5% during the financial year 2012-2013 as per the advance estimates released by the government today. This will be the lowest growth rate in a decade. Industry body FICCI's President Naina Lal Kidwai said that though this was anticipated but the number is astonishingly low. 'This is the lowest growth in almost a decade and is much below RBI's projection of 5.5% growth for the current fiscal announced in the third quarter monetary policy review. Though this was anticipated but the number is astonishingly low. Several overriding risks continue to remain dominant and it is important that we firm up steps to give a thrust to the flagging growth,' said Kidwai in a statement.

The agriculture and the manufacturing sector are expected to grow by a measly 1.8% and 1.9% respectively. What is further worrisome is the decelerating growth of the services sector which has so far been the key driver of growth.

"The need to revive the investment sentiment has become indispensable", she added. Referring to the results of a recent survey carried out amongst industry members, Ms. Kidwai said that while the reform measures taken by the government in the last few months have improved sentiments, there is a need to continue this momentum.

The upcoming budget should be an opportunity for the government to take steps that would encourage growth and boost investments. Quicker implementation of the National Manufacturing Policy, speedier decision making under the aegis of the Cabinet Committee on Investments, ushering in the Goods and Services Tax regime, passage of the insurance and pension bills in the next session of the Parliament and bringing greater competition in the coal mining sector are some of the measures that should now be in focus, said FICCI's president.

It is noteworthy that the IMF too has cut down the growth projections for India for the year 2012-13 and this downward revision too is much larger than anticipated. This performance underlines the gravity of the situation and calls for policy action in a focused manner.

“We are losing out on our position of being amongst the fastest growing economies in the world and this would play on the minds of global investors unless some swift action is taken by the government to allay any such apprehensions, says FICCI.