FY'13 GDP slows to decade low of 5%; fiscal deficit improves

Reflecting subdued economic sentiments, the growth slipped to decade's low of 5 per cent in 2012-13, though improvement in fiscal deficit figures provided some relief to the government, which is battling slowdown.
The fiscal deficit was 4.89 per cent of GDP in 2012-13, better than the Budget Estimate of 5.2 per cent on the back of higher revenue collection and savings in expenditure.
Even as the fiscal deficit has shown improvement over the government estimates, the GDP numbers released today showed the country's economic growth slowed to 5 per cent, from 6.2 per cent in 2010-11.
Reacting to the economic numbers and RBI's caution on inflation, the BSE index Sensex slumped by 455 points -- the biggest single-day drop in 15 months.

Prime Minister Manmohan Singh expressed hope that in the coming months inflation will come under greater control and provide more space to RBI to pursue pro-growth policies.
Finance Minister P Chidambaram said the growth numbers are as per the expectations and the government will focus on increasing revenue collection to restrict fiscal deficit to below 4.8 per cent in the current financial year.

Meanwhile, the data on eight key infrastructure industries revealed that their growth slowed to 2.3 per cent in April, as against 5.7 per cent in the year-ago period, mainly due to contraction in crude oil, natural gas and fertiliser output.

As per the data released by the Controller General of Accounts, the fiscal deficit was Rs 4.89 lakh crore, or 4.89 per cent of the GDP, in the last fiscal.
In the Budget, the government had pegged the fiscal deficit -- the gap between expenditure and revenue -- at Rs 5.20 lakh crore or 5.2 per cent of GDP for 2012-13.