Source: Press Trust of India via Indian Economic Business News
Economic growth may improve to 6.1 per cent in the next financial year, from the decade low of 5 per cent in 2012-13, on the back of reform measures announced after mid-September 2012, India Ratings said today. The rating agency also expects aggregate State governments’ fiscal deficit to go up to 2.4 per cent against the budget estimate of 2.1 per cent. India Ratings expects slippage in aggregate fiscal deficit of states to be 0.3 per cent of the gross domestic product, from the budgeted fiscal deficit of 2.1 per cent in 2012-13. Unlike, the earlier episode of fiscal slippage in 2008-09, the slippage in the current year is expected to be low due to absence of adverse shock of salary revision. The agency noted that both global and domestic headwinds pulled down India’s economy growth to 6.2 per cent in 2011-12. Industrial growth performance in the next fiscal is expected to improve to 4.4 per cent from 3.1 per cent in the current fiscal. The Central government tax collection in the next financial year would rise due to higher projected growth in 2013-14 leading to increased growth in current transfer to states, it said.