GDP growth at 5% ?!

India’s economy is estimated to grow by 5% in 2012-13, its slowest pace in a decade, dragged down by dismal performance in the farm, manufacturing and services sectors, piling fresh pressure on the government to devise urgent growth-boosting policies to reverse the trend.
Data released by the Central Statistics Office (CSO) showed the economy is estimated to grow by 5% in 2012-13, sharply below the 6.2% posted in the previous year and below the estimates of the finance ministry and the RBI which ranged from 5.5 to 5.9%. This will be the slowest pace of growth since 2002 -03 when the economy grew by 4%.

The provisional estimates showed the farm sector is likely to grow 1.8% in 2012-13 compared to a 3.6% expansion the previous year, while manufacturing is seen expanding 1.9% compared to 2.7% growth in the yea rago period. The services sector, which accounts for about 60% of the GDP, is likely to grow 6.6% compared to the 8.2% growth in the previous year.

The CSO's advance estimates are based on anticipated level of agricultural and industrial production, analysis of budget estimates of government spending and performance of key sectors like railways, transport other than railways, communication, banking and insurance available so far, the CSO said.
Policymakers were disappointed by the data but said the government was watching the situation and taking steps to revive growth. The finance ministry said it hoped the economy would end the year on a better note and the government would continue to take steps to revive growth.
But economists said they would revise downwards their growth estimates and called for sustained reforms to boost growth.

The International Monetary Fund on Wednesday projected growth at 5.4% in 2012-13 but said it should pick up to 6% in 2013-14. It said in a report that continued implementation of measures to facilitate investment and slightly stronger global growth should deliver a modest rebound in the near term and raise medium-term growth to the upper range of potential estimates.

India Inc stepped up calls to fast-track measures to revive investment and boost sentiment.
Ratings agency Crisil said an improvement in consumption demand over the next fiscal would help in lowering inventory build-up and increasing capacity utilization, but private investments need to be pumped up to raise and sustain growth beyond 2013-14.