Column : A growth budget all the way
However, at the present juncture, it will be very difficult to project these numbers for 2013-14. This is simply because GDP growth has rapidly slumped from a high of 9.3% in 2010-11 to an estimated 5% in 2012-13. Such a sharp decline in a short period has not been seen since 1991. Similarly, inflation, though trending down this year, remains fairly elevated at over 7% as per the WPI index. Manufacturing inflation, of course, has come down close to RBIs comfort zone of around 4%.
We appear to be at the end of the down cycle for GDP. So, what GDP number should the finance minister project in the budget for 2013-14? Given the spate of reforms and tough economic decisions taken recently, followed by an upturn in sentiment, P Chidambaram might be tempted to be a bit ambitious and project 7% GDP growth in 2013-14. If the revenues are predicated on 7% GDP