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The National Council of Applied Economic Research has scaled down its projection for economic growth to below five per cent for 2013-14, to 4.7 per cent from its earlier estimate of 5.1 per cent.
Official data on the advance estimate of gross domestic product (GDP) growth for the current financial year is scheduled to be out on Friday. The think tank also projected the Centre’s fiscal deficit to be higher at 5.1 per cent of GDP against the 4.8 per cent estimated at the start of the 2013-14 Union Budget.
If so, it would be a second year that the economy would grow sub-five per cent, albeit at a higher pace than the 4.5 per cent in 2012-13.
The forecast came despite a sharp revision downwards cent by the Central Statistics Office in the economic growth of 2012-13, from the earlier five per cent. A lower base would mean a magnifying of economic growth for the current financial year. The economy grew 4.6 per cent in the first half of 2013-14 against 5.3 per cent in the corresponding period of 2012-13.
However, NCAER also said GDP growth could touch 5.6 per cent in 2014-15.
It showed optimism on the farm sector, as it expects agriculture to grow by 4.8 per cent, from its earlier forecast of 3.9 per cent in 2013-14.
“An all-time high production of foodgrain is expected. A new record output of 270 million tonnes is estimated,” NCAER said.
It, however, stayed firm on its estimate for the fiscal deficit for 2013-14 and said it would remain at 5.1 per cent of GDP, far above the ‘red line’ of 4.8 per cent.
The Centre’s fiscal deficit had already touched a little over 95 per cent of the year’s Budget estimate by the end of December, with three more months to go for the financial year to end).
On inflation, NCAER said wholesale price inflation would moderate to 6.2 per cent in 2013-14. It had earlier predicted the WPI to be at 6.8 per cent.
“The Index has declined from 7.6 per cent during April-December 2012 to 6.2 per cent during the same period in 2013. However, the consumer price index continued to be sticky and close to double digits,” it said.
