On a day the stock market scaled new highs, Finance Minister P Chidambaram cautioned against “excessive exuberance” while at the same time pointing to the good monsoon, rising exports, strong core sector growth and a lower-than-expected current account deficit as good auguries for an economic revival.
“Steps taken are beginning to yield results,” Chidambaram said in a briefing, reeling out data that indicates a turnaround in the economy.
The core sector grew 8% in September on a higher base of 8.3% in same month last year while gross credit grew 16.8% in August and exports rose 11.5% in September. These green shoots will give the government some respite from the criticism it has received for mismanaging the economy after growth slumped to a decade-low 5% last year and 4.4% in the first quarter of the current fiscal, especially with state polls around the corner and the general elections next year.
While most private estimates see economic growth in the current fiscal at around 4%, the finance minister has a 5-5.5% range, based on a recovery in the second half, something that seems to be gradually taking shape.
The pickup in exports and contraction in gold imports have prompted Chidambaram to slash the current account deficit estimate for fiscal 2013-14 to $60 billion against $70 billion estimated in August.
On the last day of Samvat 2069, according to the Hindu calendar, Chidambaram promised more financial sector measures such as currency and index futures. Given the finance minister’s optimistic outlook on the economy, Sunday’s special muhurat trading session to mark the start of Samvat 2070 could be appropriately celebratory.