Prime Minister's key economic advisor C Rangarajan today lowered the growth forecast for the current fiscal to 5.3 per cent from 6.4 per cent projected earlier and listed out host of measures including further liberalisation of FDI norms to improve economic condition.
"Economy will grow at 5.3 per cent in 2013-14," Prime Minister's Economic Advisory Council (PMEAC) Chairman Rangarajan said while releasing the Economic Outlook for 2013-14.
The PMEAC had in April projected 6.4 per cent growth for Indian economy for current financial year. The GDP grew by 5 per cent in 2012-13.
RBI too had earlier lowered its growth projection for this fiscal to 5.5 per cent from 5.7 per cent.
In order to promote growth, Rangarajan suggested that the government should liberalise FDI investment norms, resolve tax concerns of the industry, fast track public sector investment and initiate measures to contain fiscal deficit.
Referring to the external sector, Rangarajan expressed hope that the Current Account Deficit (CAD) in 2013-14 will come down to USD 70 billion or 3.8 per cent of GDP, from USD 88.2 billion or 4.8 per cent a year ago.
As regards rupee, he hoped "at the current level (it) is well corrected. Stability is returning to the foreign exchange market. As capital flows return and as CAD begins to fall, this tendency will strengthen".
However, he added the current stance of monetary policy should continue until stability in rupee is achieved.
The rupee has lost over 20 per cent since April and had touched a life time low of 68.86 to a dollar on August 28. It is currently trading at 63.78 to a dollar.
Talking about government's resolve to bring down fiscal deficit to 4.8 per cent of GDP in 2013-14, Rangarajan said "containing (it) within the budgeted estimate could be a challenge".
