India records 4.7% growth

India’s economy expanded at 4.7 percent in the entire 2013-14 financial year, marking a second straight year of below 5 percent growth, official data released showed.

Former finance minister P Chidambaram
Former finance minister P Chidambaram

The expansion was slower than an official estimate of 4.9 percent and higher than 4.5 percent growth a year earlier. This is the second consecutive year of below five percent growth in the last 25 years.

“The GDP figures which have moderated to 4.7 percent for the fiscal are disappointing and confirms the apprehension that the economy would miss the targets of 4.9 percent predicted in the advanced estimates of this fiscal,” Chandrajit Banerjee, director general, Confederation of Indian Industry (CII) said.

“However, going forward, CII expects some pick up in investments as the de-clogging of the project pipeline would help revive demand in the economy.”
Banerjee added that CII expects a reformist budget which would effectively address the stress points in the economy and take measures to kick start the investment cycle.
Federation of Indian Chambers of Commerce and Industry (FICCI) President Sidharth Birla said the new government has given an encouraging outlook and its actions will definitely have a positive impact on the investment sentiment.
“As expected, manufacturing growth continues to disappoint. The trend needs to be reversed and the policy direction must aim at boosting manufacturing growth as an imperative for job creation.
“Constraints on procedural and regulatory sides must be reviewed to promote the spirit of enterprise.”
According statistics released by the Central Statistics Office, the gross domestic product grew at 4.6 percent in the fourth quarter (January-March) of the last fiscal.
Growth was affected by poor performance in mining and manufacturing during the January to March period.
The mining and quarrying output was down 0.4 percent, manufacturing output declined 1.4 percent. However, agriculture sector output grew at 6.3 percent. Financing, insurance and real estate increased by 12.4 percent. Electricity, gas and water supply was up 7.2 percent and construction activity rose by 0.7 percent.
In another set of data released Friday, the fiscal deficit during the 2013-14 fiscal year was Rs.5.08 trillion ($86.08 billion)), or equivalent to 4.5 percent of the country’s GDP.
It is lower than the revised estimate of 4.6 percent provided by the government during budget in February.
“The reduction of fiscal deficit to 4.5 percent of GDP as against the revised estimate of 4.6 percent is a major positive which would restore investor confidence and enhance India’s image as a stable destination for doing business,” Banerjee said.