India's economic growth stays subdued at 4.7 pct

Written by PTI | New Delhi | Updated: May 31 2014, 05:53am hrs
EcoIndia's economic growth remained subdued at 4.6 per cent in the fourth quarter of 2013-14. Reuters
India's economic growth remained below the 5 per cent mark for the second year in a row at 4.7 per cent in 2013-14, but the industry is hopeful of a rebound with a stable government headed by Narendra Modi, considered pro-business.

India's economic growth remained subdued at 4.6 per cent in the fourth quarter of 2013-14 and during the entire fiscal, mainly due to a decline in manufacturing and mining output.

As per the data, the economic growth remained below 5 per cent for two consecutive years after a gap of almost 25 years. Earlier from 1984-85 to 1987-88, the economic growth rate remained below 5 per cent.

"...the ushering in of a stable government, post elections, has revived sentiments and lifted investor confidence which would pave the way for growth. But much more is required to turn around the economy," CII Director General Chandrajit Banerjee.

The forthcoming budget, CII has suggested, should aim at reviving business confidence and giving a fillip to growth. This includes fast-tracking projects, early implementation of GST, bringing a simple, stable and non-adversarial tax regime, doing away with retrospective amendments.

The country's economy, or gross domestic product (GDP), had expanded at 4.5 per cent in 2012-13, the slowest pace in the previous decade.

Growth in 2013-14 was less than the Central Statistics Office's (CSO) advance estimate of 4.9 per cent. The economy expanded 4.4 per cent in fourth quarter of 2012-13, according to official data released here today by the CSO.

The manufacturing sector declined 1.4 per cent in the fourth quarter as against growth of 3 per cent a year ago and contracted 0.7 per cent in the financial year compared to a growth of 1.1 per cent in 2012-13.

Mining and quarrying contracted 0.4 per cent in the January-March quarter as against a decline of 4.8 per cent in the same period of 2012-13. During 2013-14, the sector's output shrank 1.4 per cent compared with a 2.2 per cent dip in production in 2012-13.

Commenting on the GDP data, FICCI President Sidharth Birla said: "Announcements made by the Prime Minister and his Cabinet Ministers over the last few days leave us with an encouraging outlook, as the governmental actions will definitely have a positive impact on the investment sentiment. Going forward, the emphasis has to be on effective implementation and timely action."

Echoing similar views, PHD Chamber President Sharad Jaipuria said: "Though growth of real GDP at 4.7 per cent for 2013-14 is below growth projections given by CSO in its advanced estimates, it is expected to improve in the current financial year 2014-15 as the government is taking significant steps to rejuvenate the economy."

According to data, farm output expanded 6.3 per cent in January-March compared with 1.6 per cent growth in the same period of 2012-13. The agriculture sector grew 4.7 per cent in 2013-14 compared with 1.4 per cent in the previous fiscal.

Per capita net national income in real terms (at 2004-05 prices) in 2013-14 is estimated to have attained a level of Rs 39,904 compared with Rs 38,856 in 2012-13.

The growth in per capita income is estimated at 2.7 per cent during 2013-14 against 2.1 per cent during 2012-13.

Per capita income at current prices during 2013-14 is estimated to have climbed to Rs 74,380 from Rs 67,839 in 2012-13, a rise of 9.6 per cent.

Gross Fixed Capital Formation (GFCF), a barometer of investment at current prices, is estimated at Rs 32.11 lakh crore in 2013-14 as against Rs 30.72 lakh crore in 2012-13.

At constant (2004-05) prices, GFCF is estimated at Rs 20 lakh crore in 2013-14 as against Rs 20.02 lakh crore in 2012-13.

According to the CSO data, the construction sector expanded 0.7 per cent in January-March as against 2.4 per cent in the year-ago period. During 2013-14, the sector grew 1.6 per cent compared with 1.1 per cent in 2012-13.

Growth in the trade, hotels, transport and communications segment slowed to 3.9 per cent in the fourth quarter from 4.8 per cent in the same period of 2012-13. In the financial year, it grew at 3 per cent compared with 5.1 per cent in 2012-13.

The services sector, including financing, insurance and real estate, expanded 12.4 per cent in the January-March quarter as against 11.2 per cent a year earlier. The segment grew 12.9 per cent in 2013-14 compared with 10.9 per cent in previous financial year.

The community, social and personal services segment grew 3.3 per cent in the last quarter of 2013-14 compared with 2.8 per cent in the corresponding period a year earlier. During 2013-14, the segment grew 5.6 per cent compared with 5.3 per cent previously.

Growth in electricity, gas and water supply was 7.2 per cent in Q4 compared with 0.9 per cent a year earlier and touched 5.9 per cent in 2013-14 compared with 2.3 per cent in the previous year.

Chidambaram expresses disappointment over sub-5 pc growth

Former Finance Minister P Chidambaram today expressed disappointment over sub-five per cent growth recorded in 2013-14, but hoped that the figures would be revised upwards.

The country's economic growth remained subdued at 4.7 per cent in 2013-14 and at 4.6 per cent in the fourth quarter of the financial year, Central Statistics Office (CSO) data said.

"The GDP data for 2013-14 present a mixed picture However, the growth rate for Q1 has been revised upward from 4.4 per cent to 4.7 per cent and for Q2 from 4.8 per cent to 5.2 per cent.

"It is therefore possible that the growth rate for the full year may undergo an upward revision. Nevertheless, I am disappointed that we could not achieve a growth rate of 5 per cent," Chidambaram said in a statement.

The clear winner, he said, is agriculture and "vindicates the policy measures" taken by the UPA-II government.

The performers are electricity and finance, insurance, real estate and business services sectors of the economy.

The weak links are "mining" and "manufacturing", he said.

"Many bottlenecks in these two sectors were cleared and I hope that the benefits can be reaped in 2014-15," Chidambaram added.

Referring to fiscal deficit, he expressed happiness that it has been contained at 4.5 per cent of the GDP in the last fiscal as against revised estimate of 4.6 per cent.

"I sincerely hope that the new government will adhere to the path of fiscal consolidation and reach the target of 3 per cent in 2016-17," he added.