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Markets will remain closed on 22nd August, 2018 on account of Bakri Id.

Only 5% GDP growth for India
Fri, 8 Feb Pre-Open

India really seems to be in dire straits. According to government statisticians, the Indian economy is expected to grow by only 5% in the year to 31 March 2013. This is versus a 6.2% GDP growth seen last year. This revised figure comes in significantly lower than the consensus estimate of around 5.5%. This current estimate is worse than all other projections made by the Reserve Bank of India (RBI) or the government and is the slowest growth the Indian economy would have seen since 2002-03.

So what does this 5% mean? Well, this number is more in line with reality according to Rupa Nitsure, chief economist at Bank of Baroda. The industrial sector has been facing a downturn for a long time and the manufacturing output has been negative for the first half of the year. Exports have been slowing on account of the weak global environment, credit growth has declined , and agricultural performance has also been weak.

The muted estimate for FY13 also means that the pace of economic expansion has slowed sharply in the second half of the year. This is given that GDP growth in the April-September period stood at a more respectable 5.4%. Thus, the indication is that the economy may grow at 4.6% in the second half of the year. The agriculture sector is expected to grow at 1.8% compared with 3.9% in the previous year, while manufacturing growth is projected to slow to 1.9% from 2.7% earlier. Lower estimates on the service sector side are contributing to lower overall growth. According to the advance estimates, the services sector, including finance, insurance, real estate and business services sectors, is likely to grow by 8.6% this fiscal year against 11.7% earlier.

The RBI cut policy rates by 0.25% in order to spur growth in the Indian economy. However, structural reforms are key for India's growth to come back to erstwhile levels. While the government has taken some corrective action, still a lot more needs to be done. According to the International Monetary Fund (IMF), it will take India tough decisions and several years to get back on its earlier growth trajectory of 8% and above. Labour laws, the land acquisition bill and GST implementation still need to happen, supply bottlenecks need to be cleared and corruption needs to be weeded out. Once these are in place, India can be back on track.

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Equitymaster requests your view! Post a comment on "Only 5% GDP growth for India". Click here!

1 Responses to "Only 5% GDP growth for India"

sethu

Feb 8, 2013

once these are in place is the KEY;Will these be ever in India.I have serious doubts;

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Stock Market Updates

FIRSTSOURCE SOL. Surges by 6%; BSE IT Index Up 0.5% (Today's Market)

Aug 21, 2018 03:04 PM

FIRSTSOURCE SOL. share price has surged by 6% and its current market price is Rs 69. The BSE IT is up by 0.5%. The top gainers in the BSE IT Index are FIRSTSOURCE SOL. (up 5.6%) and NIIT LTD (up 7.3%). The top losers are INFOSYS LTD and ECLERX SERVICES (down 0.2%).

HAVELLS IND at All Time High; BSE CONSUMER DURABLES Index Down 0.1% (Today's Market)

Aug 21, 2018 03:04 PM

HAVELLS IND share price has hit an all time high at Rs 701 (up 1.5%). The BSE CONSUMER DURABLES Index is down by 0.1%. Among the top gainers in the BSE CONSUMER DURABLES Index today are HAVELLS IND (up 1.5%) and TTK PRESTIGE (up 0.4%). The top losers include WHIRLPOOL OF INDIA (down 0.2%) and BAJAJ ELECTRICALS (down 0.7%).

BSE Sensex at All Time High; COAL INDIA Among Top Gainers (Today's Market)

Aug 21, 2018 03:04 PM

The BSE Sensex is trading at its all-time high of 38,323 (up 0.1%). Among the top gainers in the BSE Sensex today is COAL INDIA. In the meantime, the NSE Nifty is trading at 11,572 (up 0.2 %).

TORRENT POWER LTD Surges by 5%; BSE POWER Index Up 1.2% (Today's Market)

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TORRENT POWER LTD share price has surged by 5% and its current market price is Rs 246. The BSE POWER is up by 1.2%. The top gainers in the BSE POWER Index are TORRENT POWER LTD (up 5.1%) and CESC LTD (up 8.8%). The top losers are POWER GRID (down 0.1%) and GMR INFRA (down 0.3%).

SUVEN LIFE Surges by 12%; BSE HEALTHCARE Index Up 1.1% (Today's Market)

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SUVEN LIFE share price has surged by 12% and its current market price is Rs 261. The BSE HEALTHCARE is up by 1.1%. The top gainers in the BSE HEALTHCARE Index is SUVEN LIFE (up 12.2%). The top losers are JUBILANT LIFE SCIENCES (down 0.2%) and GRANULES INDIA (down 0.4%).

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