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Updated: March 20, 2013 23:42 IST

Economy to grow over 6%: India Ratings

Special Correspondent
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Atul Joshi. Photo: Bijoy Ghosh
The Hindu Atul Joshi. Photo: Bijoy Ghosh

India Ratings & Research Private Ltd. estimates the economy to grow over 6 per cent in 2013-14 if the government continued with its recent policy initiatives aimed at attracting more investment and infrastructure development.

Everything, however, would depend on execution, and, if implemented, there could be an upside too of up to 6.5 per cent, Managing Director & CEO Atul Joshi said, adding the rating and research agency expected the 2013-14 GDP (gross domestic product) growth to be 6.1 per cent.

In an interaction with presspersons here on Wednesday, he said India “did not do a bad job” in the current fiscal considering the slowdown in comparable economies had been steep. A case in point was that of Brazil where the growth slid from four to one per cent, he added. More than the GDP slowdown, “we created lot of negative noise” resulting in foreign investors deferring their investment decisions. The PE (private equity) investors also decided to put their investments on hold as a decelerating economy meant more time to exit, he pointed out.

But from September, he said, things had begun to change with the government moving ahead with the reforms, including on cutting down fuel subsidies, establishing the Cabinet Committee on Investment and deciding to go for blending and pooled price for coal.

“There was no reason for so much negativity,” he said, while pointing to several positives which included forex reserves enough for six months of imports, one of the highest.

Noting that the mood was changing for good and Union Budget had been positive, Mr. Joshi said India Ratings expected the new investments to flow in telecom, infrastructure, retail, IT and ITeS, and power sectors. With regard to areas of concern, he listed fiscal deficit and food inflation.

The agency, a part of the Fitch Group, felt corporates who had over-leveraged (borrowed more than what they can service) themselves should restructure. This would help them undertake investments, he said.

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