Pinning hopes on the Narendra Modi Government to revive the ailing economy particularly with the forthcoming Union Budget, India Inc has expressed dismay at the India economic growth rate, which has faltered to below the 5 per cent mark for the second year in a row and stood at 4.7 per cent for 2013-14, as per the CSO data released on Friday.
Meanwhile, growth has remained subdued at 4.6 per cent in the fourth quarter of 2013-14 and during the entire fiscal, mainly due to a decline in manufacturing and mining output.
As per CSO, the economic growth remained below 5 per cent for two consecutive years after a gap of almost 25 years. Earlier from 1984-85 to 1987-88, the economic growth rate remained below 5 per cent. “...The ushering in of a stable Government, post elections, has revived sentiments and lifted investor confidence which would pave the way for growth. But much more is required to turn around the economy,” CII Director General Chandrajit Banerjee.
In the forthcoming budget, CII has suggested, the government should aim at reviving business confidence and giving a fillip to growth. This includes fast-tracking projects, early implementation of GST, bringing a simple, stable and non-adversarial tax regime, doing away with retrospective amendments.
The country’s economy, or gross domestic product (GDP), had expanded at 4.5 per cent in 2012-13, the slowest pace in the previous decade.
Growth in 2013-14 was less than the CSO advance estimate of 4.9 per cent. The economy expanded 4.4 per cent in fourth quarter of 2012-13, according to official data released here on Friday by the CSO.
The manufacturing sector declined 1.4 per cent in the fourth quarter as against growth of 3 per cent a year ago and contracted 0.7 per cent in the financial year compared to a growth of 1.1 per cent in 2012-13.
Mining and quarrying contracted 0.4 per cent in the January-March quarter as against a decline of 4.8 per cent in the same period of 2012-13. During 2013-14, the sector’s output shrank 1.4 per cent compared with a 2.2 per cent dip in production in 2012-13.
Commenting on the GDP data, FICCI President Sidharth Birla said: “Announcements made by the Prime Minister and his Cabinet Ministers over the last few days leave us with an encouraging outlook, as the governmental actions will definitely have a positive impact on the investment sentiment. Going forward, the emphasis has to be on effective implementation and timely action.”
Echoing similar views, PHD Chamber President Sharad Jaipuria said: “Though growth of real GDP at 4.7 per cent for 2013-14 is below growth projections given by CSO in its advanced estimates, it is expected to improve in the current financial year 2014-15 as the Government is taking significant steps to rejuvenate the economy.”
According to data, farm output expanded 6.3 per cent in January-March compared with 1.6 per cent growth in the same period of 2012-13.
The agriculture sector grew 4.7 per cent in 2013-14 compared with 1.4 per cent in the previous fiscal.
Per capita net national income in real terms (at 2004-05 prices) in 2013-14 is estimated to have attained a level of Rs39,904 compared with Rs38,856 in 2012-13.
The growth in per capita income is estimated at 2.7 per cent during 2013-14 against 2.1 per cent during 2012-13.
Per capita income at current prices during 2013-14 is estimated to have climbed to Rs74,380 from Rs67,839 in 2012-13, a rise of 9.6 per cent.
Gross Fixed Capital Formation (GFCF), a barometer of investment at current prices, is estimated at Rs32.11 lakh crore in 2013-14 as against Rs30.72 lakh crore in 2012-13. At constant (2004-05) prices, GFCF is estimated at Rs20 lakh crore in 2013-14 as against Rs20.02 lakh crore in 2012-13.
According to the CSO data, the construction sector expanded 0.7 per cent in January-March as against 2.4 per cent in the year-ago period. During 2013-14, the sector grew 1.6 per cent compared with 1.1 per cent in 2012-13.
Growth in the trade, hotels, transport and communications segment slowed to 3.9 per cent in the fourth quarter from 4.8 per cent in the same period of 2012-13. In the financial year, it grew at 3 per cent compared with 5.1 per cent in 2012-13.
Meanwhile,fiscal deficit in 2013-14 stood at 4.5 per cent of GDP, lower than 4.6 per cent projected in the revised estimate, mainly on account of curbs on Government expenditure.
The fiscal deficit, the gap between government’s expenditure and revenue, in actual terms was Rs5.08 lakh crore as against 5.24 lakh crore projected in the revised estimate.
“The fiscal deficit is 4.5 per cent of GDP. Revenue deficit is 3.2 per cent of GDP. Effective revenue deficit is 2 per cent of GDP,” the Controller General of Accounts (CGA) said in the provisional accounts for 2013-2014.