Economy bottomed out; 6.4 percent growth seen: adviser

NEW DELHI Tue Apr 23, 2013 7:48pm IST

1 of 3. Labourers work at the construction site of a road on the outskirts of Ahmedabad April 22, 2013.

Credit: Reuters/Amit Dave

Related Topics

NEW DELHI (Reuters) - India's worst economic slowdown in a decade has bottomed out and growth is expected to pick up to 6.4 percent in the current fiscal year, chairman of the PM's Economic Advisory Council C. Rangarajan said on Tuesday.

Rangarajan was releasing a report on the state of the economy in 2012/13.

"I believe we have reached the bottom, the economy will now continue to grow at a faster rate," Rangarajan told reporters.

"The very high level of investment rate that we have even now gives us the hope that if we take action for speedy implementation of projects we can achieve the higher rate of growth quickly even in the short term," he said.

Capital investment growth in Asia's third-largest economy has slowed down to at least an eight-year low as regulatory hurdles have stalled more than 7 trillion rupees big infrastructure projects, leaving investors wary and frustrated.

Prime Minister Manmohan Singh has set up a panel known as the cabinet committee on investment (CCI) to expedite regulatory clearances for major projects. On Monday, the panel cleared several energy and power projects worth billion of dollars.

The council said the government needs to do more in the coming months to facilitate new investments, adding speedy execution of projects coupled with normal summer rains will usher in a broad-based economic recovery.

"We have also indicated that there are several actions that need to be taken in order to ensure that we achieve this higher rate of growth," Rangarajan said.

Gross domestic product probably increased 5 percent in 2012/13, the slowest pace since 2002/2003.

The panel said it expects the full-year current account deficit, seen as the main worry for the economy, to narrow to 4.7 percent in the current financial year from 5.1 percent last year, helped by higher exports and lower gold imports.

It forecast headline inflation of 6 percent in the current financial year, allowing room for the RBI to persist with monetary easing. Wholesale price-based inflation, India's main inflation indicator, slowed to 5.96 percent in March, its lowest level since November 2009.

(Reporting by Manoj Kumar; writing by Rajesh Kumar Singh; Editing by Sanjeev Miglani)

FILED UNDER:
  • Most Popular
  • Most Shared

Pending Reform

REUTERS SHOWCASE

Power Theft

Power Theft

India to invest $4 billion to tackle power theft  Full Article 

Debt Funds

Debt Funds

India monitors foreign flows into debt funds, may tighten rules  Full Article 

Bulgari Back in India

Bulgari Back in India

CEO: we shouldn’t have left India so we’re back  Full Article 

 Hindu "Modi-fication"

Hindu "Modi-fication"

Fears grow about Hindu "Modi-fication" of education  Full Article 

Weak Credit

Weak Credit

Hard to hit tax revenue target, credit weak - Jaitley  Full Article 

China Rate Cut

China Rate Cut

China surprises with interest rate cut to spur growth  Full Article 

Gold Imports

Gold Imports

RBI cautious on response to gold import surge  Full Article 

Economic Corridor

Economic Corridor

China commits $45.6 billion for economic corridor with Pakistan  Full Article 

Overseas Funds

Overseas Funds

RBI says overseas borrowed funds can be parked with banks in India  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage