2/16/14

Print

Manufacturing, mining show yields sub 5% growth forecast : Business Today

Close

Manufacturing, mining show yields sub 5%

growth forecast
Shweta Punj

February 7, 2014

A Congress leader told Business Today on the phone: "The 2009 election was a cakewalk.
This time, it's very different."
Apart from a host of sociological factors, such as the increasing number of first-time voters,
this election comes at a time when the economy is gasping for air. Businesses are crunched
for cash, small and medium entrepreneurs are fighting for survival, households are putting off
expensive purchases, youth are increasingly getting disillusioned for lack of opportunities.
These are perhaps among the most difficult times in the past decade.
And that's what the advance growth figures released by the Central Statistics Office say:
India is estimated to grow in 2013/14 at 4.9 per cent, as compared to 4.5 per cent in
2012/2013.

GDP at factor cost (2003-2013)

Sectors such as agriculture, which contributes about 15 per cent to overall GDP and
supports almost half the total workforce, grew at 4.6 per cent (including forestry and fishing) a jump from 1.4 per cent in the previous fiscal year. Manufacturing is down to negative 0.2
per cent from growth of 1.1 per cent. Mining is down to minus 1.9 per cent, and construction
grew tepidly at 1.7 per cent. The services sector, which drives nearly half of India's economy,
businesstoday.intoday.in/storyprint/203121#

1/2

2/16/14

Manufacturing, mining show yields sub 5% growth forecast : Business Today

grew at 3.5 per cent in 2013/14, down from 5.1 per cent growth in the previous financial year.
India seems to have averted the wrath of rating agencies by keeping its current account
deficit in check and by bringing its burgeoning fiscal deficit under control by ruthlessly cutting
expenditure. Even so, the effects of these cuts will hurt for a while. Take gross fixed capital
formation (expenditure on asset creation) is down from 2.6 per cent in 2012/13 to 2.1 per
cent in 2013/14, while spending on 'major subsidies' is up 13.3 per cent.
Estimates for 2014/15 look somewhat better than the current sub-five per cent growth.
Healthier agricultural output, election spending, and hopefully a stable government after
elections-which will hopefully give out the right signals to the investor community - could all
combine to keep the economy from collapsing. Structurally, the damage runs deep and it
could take years to reform the system.
Print

Close

URL for this article :

http://businesstoday.intoday.in/story/manufacturing-mining-show-yields-sub-5percent-growthforecast/1/203121.html
@ Copyright 2010 India Today Group.

businesstoday.intoday.in/storyprint/203121#

2/2