National Council of Applied Economic Research (NCAER) has projected Indian economic growth rate at 5.2-5.7 percent for current fiscal. The economic think tank NCAER has stated that country’s manufacturing sector is showing signs of nascent recovery and if investment spending accelerates in coming future, the economic growth could increase to 5.7 percent in FY15.
NCAER further stated that the growth in agriculture sector is likely to be lower in FY15 due to poor monsoon. It expects fiscal deficit at 4.5 percent of GDP for 2014-15, higher than the finance ministry’s target at 4.1 percent of GDP. NCAER projected wholesale price based average inflation rate at 6.4 percent in the reported fiscal.
Macro-economic indicators have shown signs of nascent recovery over the past two months. The index of industrial production (IIP), the principal indicator for industrial activity grew by 3.4 percent and 4.7 percent in the months of April and May 2014. Manufacturing, which accounts for 75 percent of the index, grew at 2.5 percent and 4.8 percent in April and May respectively as against negative growth in the earlier months. The consumer price index (CPI)-based inflation eased to 29-month low at 7.31 percent y-o-y in June as compared to 8.28 percent in the previous month. However, India's economic growth stayed below 5 percent for the second year in a row at 4.7 percent during FY14. The factors like high interest rate and stubborn inflation, low investments and slow execution of infrastructure projects have impacted country’s economy’s growth.