With the provisional estimates of GDP data at 7.3 per cent for 2014-15 just a notch lower than the advance estimates of 7.4 per cent, a further upswing in the economy is expected in the current fiscal despite forecast of a deficient monsoon and poor growth in private investments.
Private final consumption expenditure (PFCE) grew marginally by 6.3 per cent in 2014-15 against 6.2 per cent in 2013-14, according to the Central Statistics Office data on Friday. PFCE, which is a barometer of investments by the private sector grew 3.3 per cent in the fourth quarter of last fiscal as against 6.9 per cent in the previous quarter.
Government’s final consumption expenditure too was slower at 6.6 per cent in 2014-15 as against 8.2 per cent in the previous fiscal. For the fourth quarter, it contracted by 14.41 per cent (quarter on quarter) on the back of expenditure checks by the government to control its fiscal deficit. Meanwhile, capital formation increased from 3 per cent in 2013-14 to 4.6 per cent in 2014-15.
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Welcoming the GDP data, finance minister Arun Jaitley said that manufacturing and services sector trends indicate India can grow at 8 to 9 per cent or even higher.
“Those sectors within control of policy manufacturing and services improved substantially while those dependent on factors beyond the policy control such as agriculture (dependent on weather) and exports (dependent on foreign demand), did less well,” said a finance ministry statement.
Analysts too said that they expect a further recovery in the current fiscal on the back of a revival in private investments as well as more government spending. “We expect GDP growth of 7.7 per cent in FY16 based on the budding recovery in private investments. The monsoons continue to be a worry,” said DK Pant, chief economist, India Ratings.
Industry chamber CII, too, said that the CSO data reconfirms its own assessment that the economy is showing signs of recovery. “The figures show that investment demand is showing definite signs of improvement over the previous quarter…We expect further improvement of the key levers of the economy, as the government steps up public investment which in the process crowds in private investment to rekindle a new demand cycle …,” said Chandrajit Banerjee, director general, CII.
Fiscal deficit at 23% of BE by April
New Delhi: The Centre’s fiscal deficit touched 23 per cent of its Budget estimate in the first month of the fiscal on the back of a contraction in tax revenues.
The fiscal deficit stood at Rs 1,27,523 crore by April 30, as against the full fiscal target of Rs 5,55,649 crore, says Controller General of Accounts’ data on Friday. The revenue deficit stood at Rs 1,03,095 crore or 26.1 per cent of the BE of Rs 3,94,472 crore. For FY16, the Centre aims to contain its fiscal deficit at 3.9 per cent of the GDP and its revenue deficit at 2.8 per cent of the GDP. (ENS)