Growth pro­jec­tion for 2012-13 low

Hindustan Times (Patna) - - FRONT PAGE - HT Cor­re­spon­dent let­ters@hin­dus­tan­

NEW DELHI: The government’s mid-year eco­nomic re­view has pegged down the 2012-13 growth rate from above 7% to 5.7-5.9% — the low­est in a decade since 2002-03 — be­cause of the crip­pling in­dus­trial slow­down.

The pro­jec­tion im­plies that the growth in GDP — the value of all fi­nal goods and ser­vices pro­duced in a coun­try dur­ing a par­tic­u­lar pe­riod — for the sec­ond half of 2012-13 would be close to around 6%.

But the mid-year anal­y­sis, a government report-card tabled in Par­lia­ment on Mon­day sounded op­ti­mistic too.

“There are, how­ever, rea­sons to be­lieve that the slow­down has bot­tomed out and the econ­omy is headed to­wards a higher growth in the sec­ond half of 2012-13.”

Chief eco­nomic ad­vi­sor Raghu­ram Ra­jan sug­gested a three-pronged strat­egy to halt the slow­down. “Fur­ther steps in­clude a good con­fi­dence in­duc­ing bud­get, speed­ing up clear­ance for projects and fur­ther steps in cap­i­tal mar­ket re­forms.”

The growth in the IIP — a tool for mea­sur­ing eco­nomic ac­tiv­ity — jumped sharply in Oc­to­ber. But an­a­lysts said the RBI’s de­ci­sion on in­ter­est rate cut on Tues­day will be guided more by trends on the price front.

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