The government is doing a lot to push growth but the impact of its efforts will be felt in the second half of the fiscal when the expansion rate will show some improvement, Planning Commission Deputy Chairman Montek Singh Ahluwalia said on Thursday.
“We are doing a lot. The impact will be felt in the second half. Our expectations are that in the second half of the current year the growth rate will improve,” Mr. Ahluwalia told PTI on the sidelines of an event in New Delhi.
He was replying to a question whether the government was doing enough to support growth in the economy.
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He said as per the projection of the Finance Ministry the growth rate in the second half of the current fiscal may be near about 6 per cent, up from the first half of 5.4 per cent.
“The Finance Ministry has just come up with an estimate for the year as the whole at 5.7 to 5.9 per cent. Well that means that they think in the second half...it will go to may be something like 6 per cent or little about six per cent in order to generate the growth,” he said.
In its Mid-Year Economic Analysis presented in the Parliament earlier this week, the government lowered the growth projection for 2012-13 to 5.7-5.9 per cent from 7.6 per cent estimated earlier.
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The projection is at the lowest in a decade. In 2002-03, the economy had expanded by a mere 4 per cent.
The economic growth rate during 2011-12 had slipped to the nine-year low of 6.5 per cent because of slowing demand both globally and locally.
To propel growth and boost investment, the government announced host of measures in September and afterwards, including allowing Foreign Direct Investment up to 51 per cent in multi-brand retail, opening up of the domestic aviation sector for foreign carriers as well allowing foreign players in the domestic insurance sector.