GDP data doesn8217;t give true picture,says govt

PM announces decision to set up task force to track stalled projects in key sectors

Even as Prime Minister Manmohan Singh on Saturday decided to set up a task force under a senior official to track stalled projects in key power,coal,mines and road sectors to spur the economy,the UPA government asserted that its recent economic reforms measures have started paying dividends and the latest GDP data showing sluggish growth and sentimental reactions by the markets do not reflect the true picture.

What you are seeing in markets is sentimental,not substantive. We over-react, Economic Affairs Secretary Arvind Mayaram told The Indian Express pointing out how foreign institutional investors have responded positively and robustly to economic reform measures taken by the government in the past few months. The FII inflows in the country this calendar year,from January to May,were the second-highest in Asia after Japan.

He was responding to queries regarding the Sensex tanking last Friday following the release of the GDP data pegging the growth rate for the fourth quarter at 4.8 per cent and 5 per cent for FY 13.

One should not look at it in a month-to-month analysis. You cant ever get the right picture of the economy this way. It latest GDP data was only the validation of what CSO had said earlier. It is the same news that was there in April. It is not the news of May or June. Everybody is over-reacting to this. They should be looking ahead. Immediate impact of our recent decisions is that in Asia,highest flow of FII in the current calendar year is in Japan and the second highest in India. FII flow is the highest ever in this period, he said.

Foreign investors see the long-term fundamentals improving. That is why they are putting money in India, said Mayaram asserting that the GDP growth in FY 14 will be above 6 per cent and there can be no questions about it.

The Economic Affairs Secretary said the latest GDP data reflected the decisions taken until 8-10 months back and those taken subsequently will show results from October-November onwards this fiscal. Barely five months since it came into existence,the Cabinet Committee on Investment CCI,for instance,has cleared projects worth Rs 90,000 crore. These investments would be visible on the ground in four to six months.

Together with the CCI,set up to clear infrastructure projects awaiting regulatory clearances,the latest decision to set up a task force is aimed at,said sources,addressing the issue of delays in processes presently stalling projects worth Rs 7.5 lakh crore.

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The task force would be headed by a Secretary or Additional Secretary rank official and it will report to the Cabinet Secretary.

The idea to set up an institutional mechanism to track stalled projects was said to have been mooted by Finance Minister P Chidambaram.