The Economic Survey for 2011-12 has pegged GDP growth at 6.9 per cent for the entire fiscal and predicted a promising outlook for both growth and stability
It projected real GDP to grow at 7.6 per cent in fiscal 2012-13 and 8.6 per cent for fiscal 2014.
The outlook for growth and price stability at this juncture looks more promising, the Economic Survey for 2011-12 said on Thursday. According the survey, indicators shows that weakness in economic activity has bottomed out and a gradual upswing is imminent.
The survey projected 2.5 per cent growth in agriculture for the current fiscal and said Industrial growth pegged at 4-5 per cent, but expected to improve as economic recovery resumes.
The services sector continued to grow, risng 9.4 %, and taking its share in GDP to 59%.
In fiscal 2012, although a large part of the reason for the slowing of the economy were because of global factors, domestic factors such as monetary tightening to curb high inflation, and slowing investment and industrial activity also played a role.
The growth rate of investment in the economy likely declined significantly in fiscal 2011-12. Sharp increase in interest rates resulted in higher costs of borrowings; and other rising costs took their toll on profitability and, thereby, internal accruals that could be have been used to fund investment.
Foreign trade performance will remain a key driver of growth, the Rurvey said, adding that forex reserves enhanced, covering nearly the entire external debt stock.
However, it did acknowledge that the Indian economy has slowed, attributing it almost entirely to weakening industrial growth. The manufacturing sector grew by 2.7 per cent and 0.4 per cent in the second and third quarters of 2011-12, the latest periods for which data is available.
Inflation as measured by the wholesale price index (WPI) was high during most of the current fiscal year, though by the year’s end there was a clear slowdown. Food inflation, in particular,, has come down to around zero, with most of the remaining WPI inflation being driven by non-food manufacturing products.
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