Cautioning that global developments would continue to impact India’s growth story, the economic survey today pegged the growth rate for 2013-14 at a conservative level of 6.1-6.7 per cent.
“The overall economy is expected to grow in the range of 6.1 to 6.7 per cent in 2013-14,” the pre-Budget Economic Survey tabled by finance minister P. Chidambaram in Parliament said.
The economy is projected to grow at 5 per cent in current fiscal, the lowest in a decade. It was 6.2 per cent in 2011-12 and 9.3 per cent a year ago. The projections for the next fiscal takes into account normal monsoon, moderation in inflation rate and mild recovery in global growth. “While India’s recent slowdown is partly rooted in external causes, domestic causes are also important,” it said, adding boost to consumption coupled with supply side constraints led to higher inflation.
It said the growth story is unlikely to get support from the global economic developments and would remain tied to movement in international oil prices. Chief economic advisor Raghuram G. Rajan in his introduction to the Survey said: “These are difficult times, but India has navigated such times before, and with good policies it will come through stronger.”
Rajan prescribed shifting national spending from consumption to investment, removing the bottlenecks to investment, growth and job creation, besides making efforts to reduce cost of funds. Referring to the price situation, the Survey said that elevated food inflation would continue to remain an area of concern with inflation rate gradually inching towards double digit in December 2012.