“GDP growth rate for 2014-15 is projected at 5.2-5.7%. The higher growth of 5.7% is conditional on pick up of investment spending” National Council of Applied Economic Research (NCAER) said in a statement.

India recorded sub-five per cent in 2012-13 and 2013-14 due to general global slowdown and domestic factors like high interest rate and stubborn inflation. The Economic Survey expects the country’s economy to expand by 5.4-5.9% this fiscal.

The index of industrial production ( IIP) the principal indicator for industrial activity grew by 3.4% and 4.7% in the months of April and May 2014 respectively. Manufacturing which accounts for 75% of the index showed signs of nascent recovery clocking a growth of 2.5% and 4.8% in April and May respectively as against negative growth in the earlier months.

NCAER further said growth in agriculture sector is likely to be lower in 2014-15 year-on-year due to poor monsoon. It also expects the fiscal deficit at 4.5% of GDP for 2014-15.

Finance minister Arun Jaitley while presenting the Budget had said government will retain the fiscal deficit target for 2014-15 at 4.1% of GDP. NCAER has projected the wholesale price based average inflation rate at 6.4% in the fiscal.

Published in: The Economic Times, New Delhi, July 29, 2014