)
As all eyes are on Finance Minister P Chidambaram whether he will be able to rein in the Centre's fiscal deficit at targeted 5.3 per cent of GDP, NCAER projected it to be 5.8 per cent. Earlier, the Budget had projected the Centre’s fiscal deficit at 5.1 percent of GDP.
In its latest review of the economy, all the three sectors of the economy are likely to show better growth in the next fiscal year.
With prospects for better monsoon, it projected agriculture to grow by 2.9 per cent in 2013-14 from 1.8 per cent pegged in the advance estimates. Industry is projected to expand by 4.5 per cent against 3.12 per cent and services by 7.7 per cent against 6.58 per cent.
The Indian economy grew 5.4 per cent in the first half and the Finance Ministry still feels that it will clock a growth rate of 5.5 per cent or more against 5 per cent projected by advance estimates.
The report projected the wholesale-price inflation to be at 7.7 per cent during 2012-13 year-on-year. The RBI had last month projected WPI inflation to come down to 6.8 per cent in March, 2013 from 7.2 per cent in December. The figures for January will come on February 14.
The report said that weak external factors and subsidies contributed to the slow rate of growth and the widening of fiscal deficit, which in turn led to higher levels of inflation in 2012-13.
The budget had estimated subsidies to be restricted to 1.9 per cent of GDP, but when Chidambaram came back to the Finance Ministry he pegged it at higher 2.4 per cent.
Till December for the current financial year, the fiscal deficit has already reached 78.8 per cent of the budget estimate of Rs. 5.14 crore for 2012-13.
The report projected the country's current account deficit at over four per cent of GDP for the second consecutive year in 2012-13. It stood at a record 4.2 per cent in 2011-12. It widened to 4.6 per cent in the first half of the current financial year against four per cent in the corresponding period of 2011-12.
