UPA’s Parting Gift to Modi Sarkar: An Ailing GDP
govt faces challenge as economy grows 4.7% in FY14 on account of poor performance of manufacturing, mining and construction
India’s growth barely accelerated in the year ended March, remaining stubbornly below 5%, but disappointment was balanced by hope that the new Narendra Modi government will move rapidly to revive demand and investment and put the economy back on track, much in the manner of the skies clearing swiftly after the brief but violent storm that ripped through the national capital on Friday. India’s gross domestic product grew 4.7% in FY14, a notch higher than 4.5% in the year before, on account of the poor performance of manufacturing, mining and construction, an indication of weak investment activity. The last quarter of FY14 registered 4.6% growth, the same as in the third quarter, according to data released by the Central Statistics Office on Friday. GDP for the year came in below CSO’s advanced estimate of 4.9%. This is the third annual sub-5% growth in the last 11 years. In a separate announcement, the government said the FY14 fiscal deficit narrowed to 4.5% of GDP from 4.8% initially estimated in the budget and the revised 4.6% figure in February.
Economic revival is among Prime Minister Modi’s highest priorities and the government intends a greater focus on reforms toward this end. These include liberalising foreign direct investment norms in various sectors such as defence, ecommerce and railways, a strong emphasis on infrastructure projects, changes in the land acquisition law to make the process easier, the passing of universal tax laws such as GST and single-window clearances for doing business.
Against this, Finance Minister Arun Jaitley, entrusted with the job of reviving the economy by Modi, has to contend with a possibly weak monsoon and the central bank maintaining its focus on fighting inflation.
Sectors such as agriculture, banking and electricity bucked growth estimates. Agri and allied activities grew 4.7%
GDP grows marginally ahead of decade low last year Quarterly numbers show lack of spark