The Prime Minister informed the Governors that the

reasons for slowdown in the economic growth during the last two years could be attributed to domestic as well as global factors. Policy measures, he further said, announced in the current year have "generated optimism" which is reflected in an upturn in the Business Expectations Index for the October-December quarter, the Purchasing Managers' Index in October-December and buoyancy in capital markets. Internal accruals of the corporate sector, necessary for a pick-up in investment, have also started improving, he said adding, there has also been a moderation in core inflation. "These factors point towards recovery in GDP growth in the second half of the current year," he said. The economy expanded by 5.4 per cent in the first half of the ongoing fiscal. Singh also said the recent direct cash transfer scheme will help improve targeting, reduce corruption, eliminate waste and enhance efficiency in the public delivery system. In the past few months, the government has taken a slew of initiatives towards economic reforms, including further liberalised FDI policy, capping supply of subsidised cylinders and partial decontrol of diesel prices.