Despite the slew of measures taken by the government, the economy may not have posted a significant recovery and is likely to have grown at less than five per cent for the fourth straight quarter.
The economy is estimated to have fared marginally better than the first quarter and clocked a growth of 4.6 per cent to 4.7 per cent in the July to September quarter of 2013-14. The GDP grew at 4.4 per cent in the quarter ending June 30.
“Steps taken to boost growth will take some time before they show results. But we are optimistic that the economy will fare better in the second half of the fiscal, especially the fourth quarter,” said a senior official, adding that the full fiscal GDP growth is likely to be at least 5 per cent.
Official estimate of the second quarter GDP growth will be released on Friday by the ministry of statistics and programme implementation.
Impact of the good monsoon on rural demand and production as well as revival of some of the stalled infrastructure projects by the fourth quarter are expected to lift up growth.
“Exports are also doing well. So all these factors together will push up demand, improve employment and re-start investments,” said the official.
Analysts are also expecting subdued GDP growth in the quarter ending September 30, 2013.
“There will be some improvement but only such that while earlier we were drowning, now our heads will be slightly above water,” said an expert who did not wish to be named.
Rating agency Crisil has pegged second quarter GDP growth at 4.7 per cent and full fiscal economic growth at 4.8 per cent.
“We seem to be caught in a trough and a sharp recovery can not be expected this fiscal. Good growth in agriculture and exports can not lift overall GDP growth above 5 per cent,” said DK Joshi, chief economist at Crisil, adding that the investment cycle is yet to re-start while there is also uncertainty due to upcoming elections.
Similarly, rating agency ICRA has projected 4.6 per cent GDP growth in the second quarter of the fiscal on the back of a pick up in manufacturing and agriculture. Icra senior economist Aditi Nayar said improved farm output, rural demand and healthy exports are expected to support economic growth in the remainder of the fiscal taking the GDP growth to 4.7 per cent to 4.9 per cent.
Growth likely to be 4.6%: Poll
New delhi: India’s economic growth likely picked up slightly in the July-September quarter as improved manufacturing activity steered it from a four-year low in the previous three months, a Reuters poll showed on Tuesday.
Any improvement would be welcome news for the government as a string of opinion polls forecast a poor performance for the ruling party in general elections which must be held by next May. Economic growth virtually halved in two years to 5 per cent in the last fiscal year — the lowest level in a decade — and most economists surveyed by Reuters last month expect 2013-14 to be worse. reuters