2013-14 GDP growth may touch 7%

Hopeful of a revival in economic activity, the government is likely to peg GDP growth for 2013-14 at 6.5 to 7 per cent, higher than the 5.7 to 5.9 growth in 2012-13 that the finance ministry has estimated in its Mid-Year Economic Analysis which was released last week, according to The Financial Express.

''The impact of the ongoing European recession on India cannot be discounted. Also, despite our efforts, how far industry will be able to revive is yet to be seen,'' said a senior government official, adding that 7 per cent growth next fiscal cannot be ruled out.

The finance ministry is understood to be using the estimate for its pre-Budget consultations, and though the final growth projection for next fiscal may be revised based on later data, sources said that it is unlikely to see a huge revision in the next few months to the run up to Budget 2012-13, says the report.

Along with the flurry of measures it has already unveiled, the government is also betting on a cut in lending rates by the Reserve Bank of India to help revive the industry, which is crucial for faster economic growth.

In October, the index for industrial production jumped up to 8.2 per cent, although the cumulative growth in industrial activities between April and October  2012 is at a mere 1.2 per cent.

The farm sector may also do better with expectations that the rabi crop production will improve. Agriculture grew by a mere 2.1 per cent in the first six months of the fiscal.

The government's optimism on the improved economic scenario stems from expectations that growth has bottomed out in the first half of this fiscal when the economy expanded at 5.4 per cent.

This was also reflected in its Mid-Year Economic Analysis which said, ''There are, however, reasons to believe that the slowdown has bottomed out and the economy is headed towards higher growth in the second half of 2012-13.''