New Delhi: The government on Friday revised downwards economic growth for 2012-13 to 4.5% from the previous 5% due to sluggish performance of farming, manufacturing sectors and a decline in mining activity, raising fresh concerns about the health of the economy.
The growth is the slowest in a decade and is expected to pile more pressure on the UPA coalition as it heads into general elections later in the year.
While the growth is expected to revive in the current fiscal, critics are likely to sharpen their attack on the government over its handling of the economy.
The economy expanded at its slowest pace of 4% in 2002-03. Slowing growth and high inflation have added to the anxiety and upset household budgets. Weak industrial growth has added to the woes. The statistics office also revised upwards the growth for 2011-12 to 6.7% from the previously reported 6.2%, while growth for 2010-11 was revised downwards to 8.9% from 9.3%.
Economists cautioned that the new set of numbers on growth do not ring in fresh panic as they would be revised in the months with more data available. The government revises data periodically as more information trickles.
“It is clear that the slowdown in growth momentum is strong and there is no indication of any quick recovery, but nothing much should be read from this set of numbers as these will eventually be revised again, likely upwards. These numbers should not trigger any new panic,” said Siddhartha Sanyal, chief India economist at Barclays.
Growth has consistently slowed after the spectacular expansion of over 9% before the 2008 global financial crisis. Factors like slowing global growth, delay in regulatory approvals, policy paralysis, high interest rates and stubborn inflation have hit the economy.
Growth is expected to be around 5% in the current fiscal, and economists estimate the economy to bounce back in 2014-15 on the back of a revival in exports, farm sector and the impact of approvals to stalled projects.  |
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