With few hours left for the presentation of Union Budget 2013-14 by Finance Minister P Chidambaram, all eyes will be on UPA-II government on whether it uses its last full-budget presentation as a game-changer before the general election next year. Though, the President Pranab Mukherjee has already hinted that the coming economic year would be a tougher one, at the joint session of the Parliament.
India’s GDP growth is headed to a record decade low growth of 5% in 2012-13, due to a combination of global and domestic factors. Further, as per the Economic Survey, the recent global slowdown has thrown up new challenges for India with its export growth being continuously negative since May 2012 compared to high growth rates of even above 50 percent in some months of the previous year.
The survey also pointed that the slowdown in India is a wake-up call for increasing the pace of actions and reforms. After being branded for inaction as the economy weakened in the past two years, the Congress-led government has launched a slew of economic initiatives since September last year that have helped atleast lower the risk of a downgrade in its sovereign debt rating to junk bond status.
Moreover, India Inc worried over the declining economic growth, has asked the government to take steps in the upcoming Budget to boost investment sentiment and give a thrust to the flagging growth. As per the first official estimate by the Central Statistical Organization (CSO) last week, growth for the current financial year would decline from 6.2% in 2011-12 to 5%, much lower than the projections of the government.
The survey making a strong case for reforms has said foreign direct investment in retail allowed by the government can pave the way for investment in new technology and marketing of agricultural produce in India. With the annual Economic Survey emphasizing more on reforms to drive growth, the government may draw up a well-defined Budget to boost investor confidence and investments into the country. Along with that the Finance Minister is also expected to pave way for fast clearances of pending projects along with some announcement for infrastructure development to get the economy back on track.
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