India’s economic growth is unlikely to cross 6 per cent during the current fiscal due to the global uncertainties, an Assocham report said on Tuesday.
The chamber said that its report on the 2013 “economic situation does not see India’s growth exceeding six per cent in the current fiscal, it may not exceed 6.2-6.5 per cent even in the FY’14”.
The Indian economy registered a GDP growth of 5.3 per cent for the quarter ended September. The economy grew by 5.5 per cent growth in the June quarter and 6.7 per cent in the quarter ended September 30, 2011.
It said the economy is still grappling with the key problems of high inflation and interest rates, lack of investor confidence and a terrible situation for exporters.
It said that issues like quality of governance, inflation and fiscal situation will remain the key differentiators this year between India managing to cope up with the global slowdown and further erosion in the economic growth.
The report, which is based on inputs from economists and industry leaders, “does not see turnaround in the economy in the short-term, as uncertainty in the US and Europe has only increased denting the investor confidence worldwide”.
“Under these circumstances, it is the quality of governance and the political leadership which only can make a big difference,” Assocham President Rajkumar Dhoot said in a statement.
It also said with the fiscal deficit crossing 80 per cent of the budgeted for the entire year in the first eight months of the current financial year and the current account deficit widening to 5.4 per cent of the GDP in July-September quarter, signals about the state of government finances are not quite comforting.
The chamber expects that it would take at least another 18 months “before we can expect a complete turnaround, that too if the global situation improves”.