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Downturn over claims India’s finance minister
February 27, 2013, 10:14 am


Mr Chidambaram will present the Union Budget on March 28 [AP]

Claiming that the “downturn is more or less over”, a pre-Budget Economic Survey in India on Wednesday projected an optimistic 6.1 to 6.7 per cent growth in the next fiscal year for the country.

The survey was presented in the Indian Parliament by Palaniappan Chidambaram, India’s finance minister.

Mr Chidambaram said: “…the overall economy is expected to grow in the range of 6.1 to 6.7 per cent in 2013-14” as the economy is looking up.

The survey is a precursor to the Union Budget that will be presented on March 28 by the finance minister.

India’s recent slowdown has been partially caused by external causes like the eurozone crisis and slowing global demand, said the survey.

It said the India growth story is unlikely to get support from the global economic developments and would remain tied to movement in international oil prices.

Raghuram Rajan, chief economic advisor, in his introduction to the survey said: “These are difficult times, but India has navigated such times before, and with good policies it will come through stronger.”

Rajan prescribed shifting national spending from consumption to investment, removing the obstacles to investment, growth and job creation, besides making efforts to reduce cost of funds.

“Controlling the expenditure on subsidies will be crucial. The domestic prices of petroleum products, particularly diesel and LPG need to be raised in line with their prices prevailing in the international market,” the survey said.

The survey noted that a beginning has already been made with the decision in September last year to raise the price of diesel and again in January to allow oil marketing companies to increase prices in small increments at regular intervals.

Predicting that the headline inflation will decline to between 6.2 and 6.6 per cent by next month, the survey said that elevated food inflation would continue to remain an area of concern as it inched towards double digits in December 2012.

Source: Agencies