UPA’s Part­ing Gift to Modi Sarkar: An Ail­ing GDP

The Economic Times - - Front Page - OUR BUREAU

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





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