Unfazed by official figures that project India's economy growing at less than 5 per cent for the current financial year ending March, Finance Minister P Chidambaram on Friday expressed satisfaction that this would be an improvement over the previous year, when the economy grew at just 4.5 per cent.
Chidambaram spoke soon after advance estimates released by the Central Statistics Office (CSO) under the ministry of statistics and programme implementation said GDP growth in 2013-14 will improve to 4.9 per cent from 4.5 per cent a year ago, mainly on account of a good performance by the farm sector, though manufacturing and mining remained ''a cause of concern''.
But experts have noted that a part of the improvement can be attributed to statistical reasons – this being a preliminary forecast. For 2012-13, the CSO had had to lower growth figures to 4.5 per cent in its revised estimates from an earlier provisional forecast of 5 per cent.
Commenting on the projected growth figures, Chidambaram said, "This means that growth in the second half of 2013-14 has been better than growth in the first half of the fiscal." The growth rate in the first half (April-September) was 4.6 per cent.
"We had anticipated that growth in the second half will improve and I am happy that our estimate has come true. This estimate of 4.9 per cent for the whole year will in all likelihood be revised upwards in the first, second and final revisions over the next two years. I am confident that the final estimate will be not less than 5 per cent for the whole year," the finance minister said.
Chidambaram also said he was particularly happy that agriculture growth has been estimated at 4.6 per cent for 2013-14.
"This is a vindication of the policies pursued by the UPA (United Progressive Alliance) government, including higher minimum support price, subsidy to fertiliser, enhanced credit to farmers, provision of quality seeds, etc," he said.
He insisted that growth in the next fiscal starting April would show ''a significant improvement over 2013-14".
Echoing this optimism, the chairman of the Prime Minister's Economic Advisory Council, C Rangarajan, described the CSO projections as "encouraging news...indicating that (economic) slowdown has bottomed out,"
But business was less impressed, as manufacturing showed a contraction of 0.2 per cent.
"The GDP estimates are still below potential. What is worrisome is the poor performance estimated in the mining and manufacturing sectors, which are in the red. The growth rate would have been lower had it not been for the favourable base effect of last year," said Chandrajit Banerjee, director general of the Confederation of Indian Industry (CII).
On the positive side, the CSO estimates that India is poised to become a $1.7 trillion economy and per capita income will soar by 10.4 per cent to Rs74,920 in 2013-14.
For 2013-14, the CSO has projected a growth rate of 4.6 per cent in agriculture and allied sectors, up from 1.4 per cent a year earlier.
Manufacturing, however, is expected to register a contraction of 0.2 per cent in this financial year compared with growth of 1.1 per cent in the previous year.
Mining and quarrying is likely to contract 1.9 per cent, compared with a 2.2 per cent decline in production a year ago.