Govt lowers growth forecast for 2012-13 to 5.7 per cent

The government has lowered growth projection for the current financial year to 5.7-5.9 per cent from 7.6 per cent estimated earlier.

The Reserve Bank of India (RBI) had also earlier lowered the growth rate to 5.8 per cent for 2012-13.

While pitching for supportive monetary and fiscal policies to improve investor confidence, the Mid-Year Economic Analysis tabled in Parliament said: "Given an emerging scenario, it should be possible for the economy to improve the overall growth rate of GDP to around 5.7 per cent to 5.9 per cent for the year 2012-13."

The economy, it added, would have to record a growth rate of 6 per cent in second half of the current financial year to reach the desired growth rate. It grew by 5.4 per cent during April-September 2012-13.

The Economic Survey had pegged the growth rate at 7.6 per cent for this financial year.



To achieve 5.7-5.9 per cent growth, the Analysis said: "Both fiscal and monetary policy, however, would need to be supportive to sustain investor confidence. The government will also have to address the concerns relating to structural supply-side bottlenecks".

The economic growth rate during 2011-12 had slipped to the nine-year low of 6.5 per cent due to both domestic and global factors.

Referring to inflation, the Analysis said, further moderation in price rise is likely to commence from the fourth quarter of the financial year.

"Inflation at the end of March 2013 is expected to moderate to 6.8-7 per cent level", it said.

As regards fiscal deficit, the Analysis said, the government would endeavour to restrict it to 5.3 per cent of GDP as against 5.1 per cent envisaged in the Budget.

With inputs from PTI