Prime Minister Manmohan Singh on Tuesday said his government has made “concerted” and “serious efforts” in recent months to revive growth and investment, and the indian economy would recover in the second half of this year.
"Our economy has slowed down considerably in the last two years.
Growth in this fiscal year will be much below the average growth of about 8 percent that we have achieved in the last decade,” the Prime Minister said, addressing a conference of governors at the Rashtrapati Bhavan in New Delhi.
According to data released by the Central Statistics Office (CSO) last week, India's gross domestic product (GDP) growth is likely to be around 5% in the current financial year, the weakest in a decade, due to poor performance of manufacturing and services sectors.
India's GDP expanded by 6.2% in 2011-12.
The Prime Minister said the factors that have caused slowdown in India's economic growth in the last two years lie both outside and within the country.
"It is imperative that we do everything possible to reverse this trend and the government has made concerted and serious efforts in recent months to revive investment and growth,” Manmohan Singh said.
He said the economic reform measures announced in the current year have generated optimism which was reflected in an upturn in the Business Expectations Index for the October-December quarter, the Purchasing Managers' Index in October-December and buoyancy in capital markets.
"Internal accruals of the corporate sector, necessary for a pick-up in investment, have also started improving. There has also been a moderation in core inflation. These factors point towards recovery in GDP growth in the second half of the current year,” the prime minister said.
In the first half of the current financial year, Indian economy expanded by 5.4 percent.
On fiscal deficit, the Prime Minister said his government was hopeful to curtail it to 5.3 percent of the GDP in the current financial year and bring it down to 4.8% in 2013-14.
"We intend to contain the fiscal deficit for the current year at 5.3 percent of GDP and reduce it to 4.8% in the next year. The fiscal deficit is targeted to be reduced by 0.6 percentage points each year thereafter,” he said.