Indian economic growth forecast slashed: Mid-Year Economic Analysis
high current account deficit (CAD), the document said the government should endeavour to reduce it by improving the exports and trade balance.
It said that the CAD and trade deficit would be lower than the last fiscal. In 2011-12 fiscal, CAD was 4.2 per cent.
"We are worried about CAD. We want to take steps to monitor it," Rajan said, adding that gold imports are declining and there is a need for coming out with financial instruments which will attract investors so that they do not put money in gold, which is an unproductive asset.
Food inflation was more of a structural problem and its response to monetary policy changes is relatively weak, the Mid-Year Review said, adding that the momentum of food inflation is pointing towards moderation.
It said the recent decision of the government to open multi-brand retail to foreign investment would help consumers and farmers by improving the logistical facility.
The document said agriculture is expected to improve because of better prospects with rabi crops and dominance of irrigated wheat and rice crops.
Also, it added that services sector is expected to do better, driven by the performance of real sectors.
It said the fiscal deficit roadmap announced by Finance Minister has considerably improved business expectations and perception of the domestic and global investors.
As per the roadmap unveiled by the Finance Minister, the fiscal deficit has to be brought down to 3 per cent of the GDP by 2016-17.
HIGHLIGHTS
Following are the highlights of the Mid-Year Economic Analysis 2012-13 tabled in Parliament today:
* Economy
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