New Delhi: India’s GDP is estimated to grow at 5 percent in 2012-13, lowest during since 2003-04, on account of slower growth in industry, agriculture and services sector, Parliament was informed today.
“As per the Advance Estimates released by the Central Statistics Office, the growth rate of GDP (at factor cost at constant 2004-05) is estimated to be 5 percent in 2012-13. This growth rate is the lowest during the period 2003-04 to 2012-13,” Minister of State for Finance Namo Narain Meena said in a written reply to the Lok Sabha.
“The slowdown in growth in 2012-13 is on account of lower growth in agriculture, industry and the services sector,” he added. Meena said the slowdown is attributed to both domestic factors as well as the uncertain global economic environment.
Among domestic factors, the tightening of monetary policy during most of 2011-12 in order to control inflation resulted in the slowing down of investment and growth, particularly in the industrial sector. Global factors include crisis in eurozone and sluggish growth in several industrialised economies in 2012.
“The steps being undertaken by the government to revive the economy, include better access to finance for manufacturing sector, fast tracking of large investment projects in infrastructure, use of buffer stocks to moderate food inflation, strengthening of financial and banking sector, reducing the volatility of exchange rate,” Meena said.
Also, government has announced disinvestment in certain public sector undertakings, liberalisation of FDI in multi- brand retail, aviation, broadcasting, reduction in subsidy in diesel, the road map for fiscal consolidation.
“These measures are expected to revive market confidence, and restore growth momentum over the medium term.” He also said the government has set up the Cabinet Committee on Investment (CCI) chaired by the Prime Minister to expedite decisions on approvals and clearances for implementation of projects.”The CCI will monitor and review the implementation of major projects to ensure accelerated and time-bound grant of various licences, permissions and approvals.
This is likely to improve the investment environment by bringing transparency, efficiency and accountability in accordance of various approvals,” the minister said. In a separate reply, Meena said the performance of the industrial sector has been affected both due to hardening of interest rates as well as moderation in external demand owing to uncertainty arising from global economic crisis.
“Deceleration in rate of credit flows, infrastructure bottlenecks, high input costs, slowdown in consumer expenditure, subdued business confidence have also contributed to the slowdown in industrial performance,” he added.