Expect India to grow at 6.8% to 7% in FY13: Siddharth Roy, Tata Group

In an interview with ET Now, Siddharth Roy, Economic Advisor, Tata Group, gives his views on India’s GDP expectations. Excerpts:


ET Now: What are your expectations from the quarter 4 GDP number and the GDP for FY13 and do you think we can clock 7.6 GDP mark in FY13? What sectors would essentially drive growth in this financial year?

Siddharth Roy: Looking ahead, it appears that 7.6% at the moment is a tall order. If you look at the growth of GDP sectorally, agriculture is unlikely to grow at more than 3%. Given a weightage of say 0.14, you will have about 0.42% coming from agriculture. Industry’s growth at the moment is quite worrying. However, this negative growth rate may not last for long, it will get back to a positive territory. But even there, the average rate of growth cannot be more than 4.5% to 5% speaking very optimistically. Even that a 5% rate you will have about 1.5-1.4% sort of a growth and then comes services which will possibly give you another 5% given the weightage it has got because the growth rate of services cannot be better than 9% if industry and agriculture are not doing too well. So given this kind of a scenario, the overall rate of growth will be possibly between 6.8% and 7%.

ET Now: How confident are you of the government actually reducing subsidies in FY13 and also being able to decide on fuel price hike?

Siddharth Roy: Wherever it is politically convenient, they will possibly take the steps. It may be possible to some extent to make petrol once again market- oriented, however for diesel and kerosene, things appear to be difficult.

ET Now: What about the rupee? What is the view looking at all that is happening in the macro situation?

Siddharth Roy: So far as the rupee is concerned, we have some domestic issues which we need to possibly handle first. If your fiscal deficit is growing, that will have a spill over affect on current account deficit. This is well known, but at the same time we have not done too much to correct the fiscal deficit.