New Delhi: India's grim economic situation was reflected in the Economic Survey 2013-14, presented in the Lok Sabha on Wednesday by the Union Finance Minister Arun Jaitley. While the Economic Survey noted that fiscal deficit for 2013-14 has been contained at 4.5 per cent of the Gross Domestic Product (GDP) and Wholesale Price Index inflation has also fallen to a three year low of 5.98 per cent during 2013-14 but fiscal consolidations remains imperative for the economy.
But the growth forecast for next fiscal is between 5.4 to 5.9 per cent. The survey says that improvement in Current Account and fiscal deficits is likely to spur higher growth in 2014-15. A record food grains production of over 264 million tonnes is estimated in 2013-14 indicating an increase of 20 million tonnes in last 5 years.
The economy is likely to grow in the range of 5.4 to 5.9 per cent in 2014-15 overcoming the sub-5 per cent growth of Gross Domestic Product (GDP) witnessed over the last two years. The growth slowdown in the last two years was broad based, affecting in particular the industry sector.
Inflation, too, declined during this period, but has continued to be above the comfort zone, owing primarily to the elevated level of food inflation. The Economic Survey predicts that moderation in inflation would ease the monetary policy stance and revive the confidence of investors, and with the global economy expected to recover moderately, particularly on account of performance in some advanced economies, the economy can look forward to better growth prospects in 2014-15 and beyond.
The survey also points out at the downside risks to the economy arising from a poor monsoon, the external environment and the poor investment climate. After recovering in 2009-10 and 2010-11 from the crisis and growth slowdown of 2008-09, GDP growth slowed to below 5 per cent for two consecutive years, i.e. 2012-13 and 2013-14.