India’s economic growth is expected to gain some traction in the fiscal ending March 31 from a 12-year low of 4.5 per cent in 2012-13 backed by a good showing in farm and allied sectors, according to advanced estimates by the government.
But a contraction seen in manufacturing and mining may delay the green shoots from sprouting anytime soon.
The Central Statistics Office (CSO) pegged the gross domestic product (GDP) growth at 4.9 per cent during 2013-14, up from a low of 4.5 per cent last year.
Agriculture is expected to grow 4.6 per cent in the current fiscal as against 1.4 per cent a year ago, while manufacturing sector is seen contracting by 0.2 per cent compared with 1.1 per cent growth in 2012-13.
Estimates of growth in services sector has come as saving grace. The sector, which contributes about 60 per cent to India’s economy is likely to grow at 6.9 per cent compared with 7 per cent last year, the CSO data showed.
However, within services, estimated growth in trade, hotels, transport and communication sectors during 2013-14 is expected at 3.5 per cent as against growth of 5.1 per cent in the previous year.
This is mainly on account of decline of 18.4 per cent in the sales of commercial vehicles during April-December 2013 as compared to fall of 2 per cent during the same period last year. Finance Minister P Chidambaram is expected to give some stimulus to automobiles industry, where growth has stifled in the past year.
The other sectors in services such as financing, insurance, real estate and business services is expected to show a growth rate of 11.2 per cent during 2013-14 as compared with the growth rate of 10.9 per cent in 2012-13, on account of a handsome deposit and credit growth in the banks.
The growth rate of community, social and personal services during 2013-14 is estimated to be 7.4 per cent.
The silver lining appeared in the growth rate in per capita income that is estimated at 2.8 per cent as against the previous year’s estimate of 2.1 per cent, according to CSO data.
The overall growth in the economy has been projected at a much lower than the budgetary projections for this year. Chidambaram had projected the GDP growth rate in the band of 6.1-6.7 per cent when he presented the budget for 2013-14.
He later revised it down to 5 per cent. India Inc demanded policy makers identify underlying negative factors affecting growth in manufacturing and mining sectors and take due measures.
