USUAL REVISION Govt revises FY13 GDP growth to 4.5% from 5%

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.

US downgrades India's aviation safety ranking

New Delhi: The Centre’s continued failure to strengthen the aviation safety oversight mechanism has led to the US Federal Aviation Administration (FAA) downgrading India’s safety ranking in the skies. After this first-ever downgrade on Friday, India is now among 11 category II countries with weak aviation regulatory agencies. In the same bracket as India are, among others, Bangladesh, Barbados, Ghana, Nicaragua and Sint Maarten, a Caribbean island nation of 37,000 people.      As a result of the international embarrassment, caused mainly by a severe shortage of technical staff in the Directorate General of Civil Aviation (DGCA), Indian carriers that fly to the US—Air India and Jet Airways—will not be able to add any more flights on the sector or have a new destination city in the US. Also, American authorities can now hold up Indian aircraft for checks, delaying flights.      The downgrade does not mean Indian carriers are unsafe to fly. It is a result of the fact that the Centre failed to strengthen the DGCA so as to have an effective eye on air traffic that grew here by leaps and bounds after 2005, when low-cost carriers started mushrooming.      Also, the soured Indo-US relationship after the Devyani Khobragade visa incident are being blamed for the FAA action. US downgrade may push air fares up  New Delhi: With the US Federal Aviation Administration downgrading India to category II, its airlines — and passengers flying them — are bound to suffer the most. As on Friday, the FAA ranked 88 countries, with 77 of them, including Pakistan and Fiji, being in the top category I.      Other countries may now express doubts over Indian carriers’ safety record and insist on coming here for checks. Recently, Japan and the European Aviation Safety Agency (EASA) had insisted on auditing the DGCA, but India had rejected their demand. Turning down such requests — which are bound to increase — will be tough following this downgrade. The increased risk perception will push up insurance underwriting rates for airlines and the same will be recovered from passengers through higher fares.      Aviation minister Ajit Singh expressed hope that India will soon get its top safety ranking back. “The FAA audited DGCA last December and found 33 issues with it. As of now, only two of those issues are unresolved-—hiring of technical people and airworthiness of aircraft through route-proving flights. All this will be done by Marchend. After that nothing will be left and we hope to be back in category I. The FAA move is disappointing and surprising given the fact we had addressed most of their concerns,” Singh said.      The US regulator, while downgrading DGCA, said, “The FAA has determined that India, at this time, is not in compliance with the international standards for aviation safety oversight.” The FAA, however, acknowledged the steps taken by India in the past few days—like creating posts for 75 flight operations inspectors who will be hired at market rates.