As per the Confederation of Indian Industry (CII) survey, India's economy is likely to grow in the range of 4.5 to 5 percent during the second half of the current fiscal year. Highlighting political uncertainty as the biggest concern for growth, CII noted that although domestic economy may have already bottomed out in the previous quarter, the recovery process is on sluggish mode.
Presenting a lethargic picture of the Indian economic outlook, CII highlighted that growth uncertainty, high food inflation, and rising borrowing costs have all impeded consumer demand. The industry body does not expect any significant improvement in the GDP growth for the second half of FY14 as against the first half. India's economic growth slowed to a decade low of 5 percent in the previous fiscal and 4.6% in the first half of FY14 owing to the global slowdown and domestic factors, like high interest rates.
In order to boost the growth, CII has suggested the government to take necessary steps to improve investment climate in the country and boost domestic demand. It suggested the government to halve the threshold limit of fast-track projects from the current level of Rs 1,000 crore to speed up the clearances of the held-up projects. Further, CII has stated that it is time that the monetary policy to be directed at stimulating growth as inflation was showing some signs of moderation. WPI inflation eased to five month low at 6.16% in the month of December on y-o-y basis as against 14-month high of 7.52% in November. The industry body expects that exports are likely to increase at a moderate pace during the current quarter. During April-December’2013, value of exports increased by 5.94% to $230.34 billion as against $217.42 billion in the same period of previous year.
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