Reflecting subdued economic sentiments, GDP figures released Friday showed growth slipping to a decade’s low of five per cent in 2012-13, while improvement in fiscal deficit figures gave some relief to the government.
The fiscal deficit was 4.89 per cent of GDP in 2012-13, better than the Budget estimate of 5.2 per cent, due to higher revenue collections and savings in expenditure.
Friday’s GDP numbers showed India’s growth slowing to 5 per cent, down from 6.2 per cent in 2010-11.
There was an immediate impact in the stock markets: the BSE’s Sensex slumped by 455 points, its biggest single-day drop in 15 months.
Meanwhile, data on eight key infrastructure industries showed their growth slowed to 2.3 per cent in April, against 5.7 per cent in the same period last year, mainly due to a fall in crude oil, natural gas and fertiliser output.
Prime Minister Manmohan Singh expressed the hope that in the coming months inflation will come under greater control and provide more space to the Reserve Bank to pursue pro-growth policies.
The RBI is due to announce its mid-quarterly policy on June 17.
Finance minister P. Chidambaram said growth numbers were as per expectations and the government will focus on increasing revenue collections to restrict fiscal deficit to below 4.8 per cent in the current financial year.
According to data released by the controller-general of sccounts, the fiscal deficit was `4.89 lakh crores (4.89 per cent of GDP), in the last fiscal. In the Budget, the government had pegged the fiscal deficit — the gap between expenditure and revenue — at `5.20 lakh crores (5.2 per cent of GDP) for 2012-13.
The value of the rupee, another key economic indicator, slumped to a 11-month low of 56.50 against the US dollar.