New Delhi, Feb 7 (PTI): The finance ministry said Thursday the Central Statistical Organisation’s economic growth projection of 5 per cent for the current fiscal is below expectations but the government will continue efforts to revive the economy.
”The CSO's growth estimate, no doubt, is below what we had expected it to be. We are keeping a watch…. We have taken and we will continue to take appropriate measure to revive growth,” the ministry said in a statement.
The CSO forecast of 5 per cent, if it proves accurate, will make it the lowest growth figure in a decade. In 2002-03, GDP had grown at 4 per cent. Since then, the economy has been expanding at over 6 per cent, the highest rate being 9.6 per cent in 2006-07. The economy grew by 6.2 per cent in 2011-12 fiscal.
The ministry, however, expects the final numbers to be better as indicators are looking up since November.
”As per practice, this projection is based on extrapolation of numbers till November 2012. Since then leading indicators have turned up, suggesting some hope that we will end the year on a better note,” the ministry added.
The CSO's estimate, released before the close of the financial year to help the government plan the budget better, is sharply lower than that of the Reserve Bank of India (5.5 per cent) and the government (5.7 per cent).
The lower growth estimate is mainly on account of poor performance of manufacturing, agriculture and services sector.
The CSO pegged a lower growth in agriculture at 1.8 per cent in 2012-13, compared to 3.6 per cent 2011-12. Manufacturing growth is also expected to drop to 1.9 per cent this fiscal, from 2.7 per cent last year.
“The reduction in growth in agriculture and allied sector has been on account of rainfall being lower than normal, particular in the month of June-July. In the industry sector, growth has been lower mainly on account of a reduction in growth of manufacturing sector,” the ministry said.
The latest estimate of 5 per cent for the entire fiscal means that the pace of economic expansion has slowed sharply in the second half of 2012-13, given that GDP growth in the April-September period was 5.4 per cent.
According to the advance estimates, the services sector including finance, insurance, real estate and business services sectors are likely to grow by 8.6 per cent this fiscal, against 11.7 per cent last fiscal.
However the growth in the mining and quarrying is likely be slightly better at 0.4 per cent, compared to contraction of growth of 0.6 per cent a year ago.
Growth in construction is also likely to be 5.9 per cent in 2012-13, against 5.6 per cent last year. MORE PTI JD KKS CS SA 02071156 NNNN
Yesterday, the International Monetary Fund (IMF) had said that the Indian economy would grow by 5.4 per cent in 2012-13, but should pick up to six per cent in next fiscal.
The Indian economy had expanded by 8.4 per cent in both 2010-11 and 2009-10, while growth in 2008-09 was 6.7 per cent.