NCAER lowers India FY14 growth forecast to 4.8-5.3%

NEW DELHI: Think tank NCAER today said the country's growth rate is likely to be in 4.8-5.3 per cent range in the current fiscal, lower than its previous forecast of 5.9 per cent.

NCAER revised its forecast downwards due to slowdown in key manufacturing and services sectors.

" GDP growth rate projected at between 4.8-5.3 per cent," National Council of Applied Economic Research (NCAER) said in its Mid Year Review of the Economy 2013-14.

"The industrial sector continues to under-perform due to sluggish growth of manufacturing and contraction of output in the mining and quarrying sector...The growth of services sector is lower as compared to last year resulting in downward revision of estimates to 6.6 per cent," NCAER added.

Last month, IMF had lowered its projection of India's growth rate to 3.75 per cent in 2013 from 5.7 per cent estimated earlier.

The IMF's GDP at factor cost forecast, which is a part of its World Economic Outlook, pegged India's growth at about 5 per cent in 2014.

ADB had also lowered India's growth projection for 2013-14 to 4.7 per cent from 6 per cent earlier saying the recent rupee depreciation and capital outflows could adversely impact the country's economy.

Meanwhile, Finance Minister P Chidambaram today exuded confidence that the economy will pick up in the second half and record a growth rate of 5-5.5 per cent in 2013-14.

GDP growth fell to a decade-low of 5 per cent in 2012-13 as investments slowed and factory output decelerated. In the April-June quarter, the growth rate was 4.4 per cent.

The fiscal deficit is estimated at 5.1 per cent of GDP and Current Account Deficit (CAD) is estimated to remain at 4.5 per cent of GDP, NCAER said.