‘Economy to rebound next fiscal on strong growth in H2FY14’

The economy is likely to see a revival in FY15, with growth in the second half of the fiscal likely to pick up to 5.2 per cent, said TCA Anant.

3 min readFeb 8, 2014 03:36 AM IST First published on: Feb 8, 2014 at 03:36 AM IST

The economy is likely to see a revival in FY15, with growth in the second half of the fiscal likely to pick up to 5.2 per cent, said TCA Anant, the country’s chief statistician and secretary, ministry of statistics and programme implementation, in an interview with Surabhi .Excerpts:

What is your reaction to the advance estimate of national income?

The projection of 4.9 per cent growth in FY14 is slightly better than the first half of the fiscal. This is largely on account of good performance by agriculture and financial services sectors. Manufacturing has performed marginally worse than last fiscal while mining will do slightly better. The other sectors are expected to perform more or less the same.

Do you think the scaling down of GDP numbers for last fiscal boosted the advance estimates for FY14?

Not really. One needs to understand how the national income accounts are constructed. The base is not a consequence in the growth figures was this fiscal. The advance estimate is consistent with the GDP data for the first half of the fiscal and along with the better performance in farm and financial services. That explains the difference in the first half and full fiscal GDP estimates. The data on annual survey of industries (ASI) is used only when it is available and helped revise the growth for FY12.

There is a perception that inclusion of ASI data helps revise GDP data upwards. Your comments:

The relationship between the movement in ASI value added and growth rate of index of industrial production is not so easy to predict. So some years, it may even pull down the GDP numbers. Inclusion of ASI data in the second revision of GDP estimates is principally a new development since it is only now that the data comes with a relatively lesser time lag.

The investment rate has consistently declined. Your comments.

Yes, capital formation this year has declined. This is specifically because of low investments in machinery.

Do you see a revival in FY15?

Yes, it is implicit in the growth picture over the last five to six quarters. While GDP growth touched a low of 4.4 per cent in the first quarter of FY14, it has since then gone up to 4.8 per cent in the second quarter, taking the first half average to 4.6 per cent. As indicated by the advance estimates, the economy is likely to register 5.2 per cent growth between October and March FY14.