India lowers 2012-13 growth forecast to 5% | SupportBiz


India lowers 2012-13 growth forecast to 5%

The Indian economy this fiscal would grow at a sharply lower rate of 5%, the lowest in a decade, due to poor performance of agriculture, manufacturing and services, according to government estimates.

In 2002-03, the Gross Domestic Product (GDP) had grown at 4%.

"The growth in GDP during 2012-13 is estimated at 5% as compared to a growth rate of 6.2% in 2011-12," said an official release quoting advanced estimates released by the Central Statistical Organisation (CSO).

The estimates lowered the growth in agriculture and allied activities to 1.8% in 2012-13, compared to 3.6% in 2011-12.

The figure is much lower than the government and the Reserve Bank projections of 5.9 and 5.5% respectively. In fiscal 2011-12, the economy had grown at 6.2%.

C. Rangarajan, chairman of the Prime Minister's Economic Advisory Council, found the data "disappointing" but said the final figure could still be higher than currently forecast.

"It can be revised upward," he said.

The data showed that agriculture, manufacturing, electricity generation and mining were the major drags on the economy.

"Agriculture, forestry and fishing is estimated to grow at only about 1.8% from 3.6%, while manufacturing stands to increase marginally by 1.9% from 2.7% and electricity, gas and water supply will inch further only by 4.9% from last fiscal's growth rate of 6.5%."

The growth in the mining and quarrying sector is estimated to recover by 0.4 percent from last fiscal's negative 0.6% deceleration.

The estimated growth in GDP in service sectors such as trade, hotels, transport and communication sectors is placed at 5.2% from a growth of 7% in the previous fiscal.

The service sectors like financing, insurance, real estate and business services is expected to show a growth rate of 8.6% from an increase of 11.7% in 2011-12.

The finance ministry said in the report that growth was likely to improve in the second half the current financial year and it would remain between 5.7 and 5.9%.