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.
Following are the highlights of the Mid-Year Economic Analysis 2012-13 tabled in Parliament today:
* Economy expected to grow at 5.7-5-9 pc in 2012-13.
* GDP growth in H2 seen at 6 pc against 5.4 in first half.
* Slowdown seems to have bottomed out.
* Global economic climate continues to be fragile.
* Monetary and fiscal policies should be supportive to boost investor confidence.
* Recent fiscal consolidation plan has improved investors' perception of economy.
* Fiscal deficit for this fiscal likely to be 5.3 pc of GDP.
* Inflation expected to moderate in Q4; March-end inflation seen at 6.8-7 pc.
* Moderation in inflation will facilitate softening of monetary policy stance by RBI.
* Agriculture to better on good prospects of Rabi crop.
* Services sector expected to post better growth.
* Both, Current Account Deficit and Trade Deficit likely to be lower than previous fiscal.
* Tight monetary policy & higher borrowing cost dented investment flow.
* Downside risks associated with global and domestic factors may impact direct tax collection.
India lowers economic growth forecast, says on track for fiscal deficit target
(Reuters) India lowered its official economic growth forecast to between 5.7 and 5.9 percent for this fiscal year, the finance ministry's mid-year economic review said on Monday, but said it was on track to meet a fiscal deficit target of 5.3 percent.
The budgeted forecast for GDP growth in the 2012/13 fiscal year was 7.6 percent, but growth was just 5.4 percent in the first half of the year. Finance Minister P. Chidambaram recently projected growth of between 5.5 and 6 percent for the year.
The government has struggled to contain the deficit, which has swelled because of costly oil subsidies and sluggish tax revenues, prompting global ratings agencies to warn of a possible credit downgrade.