Amid rising concerns over the deteriorating macroeconomic indicators of the country, the Department of Economic Affairs (DEA) secretary Arvind Mayaram said that Indian economy growth is likely to pick up in the third and fourth quarters of the current fiscal. The Indian economic growth had slowed down to a four year low at 4.4 percent in Q1 FY14.
Mayaram assured investors that there was no need to get excessively worried over the country’s fiscal deficit and said that the government would be able to achieve fiscal deficit target of 4.8 percent of GDP in the current fiscal. In order to cut government spending in non-critical areas, the government has recently announced a slew of austerity measures including banning government departments for holding meetings in 5-star hotels among others. Meanwhile, the government has been introducing austerity measures since 2008-09. Earlier, in November 2012, austerity measures announced by government helped it to contain the fiscal deficit at 4.9 percent of GDP in the previous financial year, against the budgeted target of 5.1 percent of GDP.
Referring to the rising inflation, Mayaram said that inflation would come down in near future on the back of strong farm output. Indian agricultural growth would get a boost from a strong monsoon and expected to grow by 4-5 percent in the current fiscal as against 1.7 percent in the previous fiscal. The wholesale price inflation rose to a six-month high of 6.10% in July as against 5.79% for the month of July on account of record climb in food prices.
