In a development that will offer some respite to the ruling alliance, which faces an uphill struggle to combat a potent mix of high prices, falling rupee and crippling industrial deceleration in an election year, the Central Statistics Office (CSO), pegged economic growth rate for 2013-14 at 4.9 against 4.5 percent in 2012-13 and also tad higher than the general expectation of a growth of 4.7-4.8 percent. The economy grew at 4.6 percent annually in the first half of the current fiscal year, down from 5.3 percent in the corresponding period a year ago.
The growth figure is marginally lower than the finance ministry's estimate of a 5 percent growth, mainly on account of contraction in manufacturing sector. As per the advance estimate, the manufacturing sector is expected to slow down to -0.2% versus 1.1% on a year-on-year basis, while encouragingly agriculture is set to accelerate at 4.6% against 1.4% last year.
Basically, the sectors which registered growth rate of over 5 percent were financing, insurance, real estate and business services, community, social and personal services and electricity, gas & water supply. The sector, financing, insurance, real estate and business services, is expected to show a growth rate of 11.2 per cent during 2013-14 as compared to growth rate of 10.9 per cent in 2012-13, on account of 15.9 per cent growth in aggregate deposits and 14.5 per cent growth in bank credit as on December 2013.
Positively, construction sector is also set to do better, with projection to grow at 1.7% versus 1.1% Year-on-Year (YoY), while services sector is expected to stay flat at 6.9% against 7% last year.
Further, according to the latest estimates available on the Index of Industrial Production (IIP), the index of mining, manufacturing and electricity registered growth rates of (-)2.2 per cent, (-)0.6 per cent and 5.4 per cent, respectively during April-November, 2013-14, as compared to the growth rates of (-)1.6 per cent, 0.8 per cent and 4.5 per cent, respectively during April-November, 2012-13.
In light of the slow growth in manufacturing sector, Finance Minister P Chidambaram is widely expected to announce measures including a cut in factory gate duties on some products to push up manufacturing output when he presents an interim budget for the coming fiscal year in parliament on February 17.
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