GDP seen growing at decade-low 5%
Though it was clear that the economy was poised to expand at the lowest rate in a decade this fiscal, the data showed the slowdown has been worse than expected.
Even as Central Statistics Office data confirmed that a persistent stagnation in consumption and investment has stultified aggregate demand, the finance ministry remained optimistic and pinned hopes on “leading indicators having turned up” since November. It said the year might end on a better note and promised to be watchful and take steps to revive growth. Analysts reckon that the latest GDP estimate might increase pressure on the government to unveil a growth-oriented Budget.
RBI governor D Subbarao said Thursday’s data would be taken into account while framing monetary policy for its next review in March.
Subbarao added that the central bank was looking forward to the upcoming Budget to get a better sense of the government’s fiscal consolidation plans. The RBI had lowered its key policy rate for the first time in nine months on January 29 to 7.75%.
Prime Minister’s Economic Advisory Council chairman
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