Buoyed by good performance of the farm sector, economic growth in India in the current fiscal is estimated to rise to 4.9 per cent, though it is below potential as manufacturing and mining sectors continue to remain a cause of concern.
"GDP growth rate in India during 2013-14 is estimated at 4.9 per cent as compared to the growth rate of 4.5 per cent in 2012-13," according to advanced estimates released today by the Central Statistics Office (CSO).
Part of the improvement can be attributed to statistical reasons as the CSO had earlier lowered growth for 2012-13 fiscal to 4.5 per cent in its revised estimates from an earlier provisional forecast of 5 per cent.
While the Chairman of the Prime Minister's Economic Advisory Council C Rangarajan described it as "encouraging news...indicating that (economic) slowdown has bottomed out,"the India Inc said the growth was below potential and the government would need to take steps to boost manufacturing which showed a contraction of 0.2 per cent.
"The GDP estimates (are) still below potential...What is worrisome is the poor performance estimated in the mining and manufacturing sectors which are in the red. The growth rate would have been lower had it not been for the favourable base effect of last year," CII Director General Chandrajit Banerjee said while commenting on advance GDP estimates of the CSO.
However, as per the CSO estimates, India is poised to become a USD 1.7 trillion economy and per capita income will soar by 10.4 per cent to Rs 74,920 in 2013-14.
For 2013-14, the CSO has projected a growth rate of 4.6 per cent in agriculture and allied sectors, up from 1.4 per cent a year earlier.
Manufacturing, however, is expected to register a contraction of 0.2 per cent in this financial year compared with growth of 1.1 per cent in the previous year.
Mining and quarrying is likely to contract 1.9 per cent, compared with a 2.2 per cent decline in production a year ago.
The latest estimate of 4.9 per cent for 2013-14 implies that the pace of economic expansion improved in the second half, given that GDP grew 4.6 per cent in the April-September period.
"To achieve higher growth going forward, the principles of sound governance, clear policies and effective implementation should be adhered to. Also, there is a need to shift to time-bound decisions over time-bound actions " said FICCI President Sidharth