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India on Friday revised down its economic growth for 2012-13 to 4.5% from the previous estimates of 5% suggesting that the slowdown is deeper than was thought of earlier.
India’s economy is battling to claw out of a crippling deceleration hit by a toxic mix of a depreciating rupee, dipping investment, high borrowing costs, rising prices and shrinking job prospects.
India’s economy grew 4.8% during July-September, marginally higher than the previous three months’ 4.4% growth, aided by a rebound of the farm sector at 4.6%, but a jump back in factory output, which remains critical to spin jobs and multiply income.
All eyes will be on advance estimates for GDP growth rates for 2013-14 that is expected to be released next week.
The Reserve Bank of India (RBI) in his third-quarter monetary policy review this week projected that the economy will grow by less than 5%.
The second quarter estimates of India’s gross domestic product (GDP) — the value of all goods and services produced in the country — show that India’s economy will have to expand at an average of 5.6% during October-March to grow at 5% — a far cry from the average 8% growth India’s planners had estimated during 2012-17.
GDP growth in 2011-12 has, been revised upwards to 6.7% from 6.2%, but that of 2010-11 has revised downwards from 9.3% to 8.9%.
High prices have hurt family budgets hard and firms are offering meagre salary hikes besides holding back expansion plans and hiring.
Besides, high inflation has prompted the RBI to raise lending rates.