The government may have accused global rating agencies Standard and Poors and Fitch of relying on old data or even herd behaviour for downgrading their outlook on India,but the Planning Commission,one of the highest policymaking bodies in the country,is also looking at a substantial downward revision of its growth projections.
A senior official assisting Prime Minister Manmohan Singh at the G20 summit said the average gross domestic product (GDP) growth of 9 per cent estimated for the 12th Five-Year Plan period (2012-17) looked very unrealistic in the light of the latest economic data and would warrant a relook.
Growth was just 6.5 per cent in 2011-12. We will be lucky if GDP grows at 6.5-7 per cent this year. Over the next two years,at least,the growth rate is unlikely to improve. So the Commissions projection (for the 12th Plan) will have to be revised downwards, the official said,adding that this would be announced shortly. The official attributed the slowdown partly to external factors,even as he admitted that the government was in denial mode on the issue.
Speaking on the same lines,Prime Minister Manmohan Singh told the G20 plenary session here: Like other emerging economies,India too has slowed down. The global downturn and especially the impact on capital flows have played their part. Internal constraints have also affected performance and we are working to correct them. He said the government was taking steps to revive investor sentiment,focusing heavily on infrastructure investment and was committed to promote an atmosphere conducive to enterprise and creativity.
Our policies will be transparent,stable and designed to provide a level playing field to both domestic and foreign investors, he said. Singh said India was focusing on reversing the fiscal expansion following the turmoil in 2008. This will require tough decisions,including on controlling subsidies,which we are determined to take, he said.
FM: Taking steps to up foreign investment
New Delhi: The government is taking steps to improve inflow of foreign investment and the impact of the initiatives will become visible after some time,Finance Minister Pranab Mukherjee said on Tuesday. In certain areas we have to take appropriate measures. We have already started taking appropriate measures…These have started yielding results, he said.