RBI slashes growth projection to 5% for 2013-14
The RBI in its second quarter review of monetary policy reduced the growth forecast for current fiscal 2013-14 to 5% from the earlier projection of 5.5%. The RBI had projected a growth of 5.5% for 2013-14 in its first quarter monetary policy on July 30, 2013. The economy grew by 4.4% in the first (April- June) quarter of current fiscal. It had expanded by 5% 2012-13 fiscal, the lowest level in a decade.
As per RBI chief Raghuram Rajan, strengthening export growth and signs of revival in some services, along with the expected pick-up in agriculture, could support an increase in growth in the second half of 2013-14 relative to the first half. He added that the revival of large stalled projects and clearances by the Cabinet Committee on Investment (CCI) would prop up investment and overall economic activity towards the close of the year.
It must be recalled that the World Bank and International Monetary Fund (IMF) also lowered the growth forecast for India for current financial year to 4.7% and 3.75% respectively.