That the Indian growth story has taken a huge set back is evident to all. At 6.5%, the Indian economy grew at the slowest pace in nine years in FY12. As we all know, the problems are only stretching and the current year looks no different. With issues like global economic slowdown, rising fiscal deficit, inflation, falling industrial production, rupee fall and policy paralysis, it is hard to be optimistic as far as future growth is concerned.
So no wonder that the Planning Commission has cut down its growth estimates from 9% to 8.2% for the next five fiscal years starting from FY13. The estimates for different sectors have been cut down as well. The manufacturing sector growth has been revised down by 1.8% and farm sector estimated to grow at just 4%. We agree with Commission's estimate of a drag in FY13 and FY14. However, we would like to take the Commission's 9% growth estimate in end of the five year term with a pinch of salt.
The current slowdown is not just an outcome of the global events. Backhome, the things are in a real bad shape. There is not a single sector that is not a victim of Government's inertia with regards to reforms and policies. The Indian growth story seems to be running out of steam. The large capital investments have taken steep plunge. The investment in infrastructure that forms the backbone of Indian economy has seen more than 50% dip on account of the policy delays. Unless the Government bites the reforms bullet, even the downward revised estimates look over ambitious.