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Monday, 03 Jun 2013
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Indian economy grows @ decade low rate

 

The Indian economy is assessed to have expanded 5 per cent during the fiscal 2013, the slowest pace over the decade, according to provisional estimates of national income released by Central Statistics Office (CSO). Worse, this was the second consecutive year of a retard Indian economy has witnessed, from 6.2 per cent in the preceding fiscal and a healthy 9.3 per cent in the fiscal 2011. The steep slide in the Gross Domestic Product (GDP) growth rate jolted analysts, as the feat has raised misgivings about the resilience of the economy that had made a quicker and sharper recovery from 6.7 per cent in the global meltdown scarred 2009 with 8.6 per cent in the following year and 9.3 per cent in 2011. Prior to 2009, the economy had chugged at 9+ per cent for three consecutive years.

 

Sectoral GDP Growth Chart_Indian Economy_ProjectsToday

 

The retard in growth was largely confined to manufacturing, which stagnated during the year, against 2.7 per cent in the fiscal 2012, 9.7 per cent two years back, and 11+ per cent in the fiscal 2011. Farm income also slowed to 1.9 per cent from 3.6 per cent and construction from 5.6 per cent to 4.3 per cent. In fact, reflecting widespread malaise, all major sectors recorded a decline in the growth rate, barring government administration-splashed community, social & personal services that grew little faster at 6.6 per cent. Gross fixed assets investment inched up 1.7 per cent, against 4.4 per cent in the preceding fiscal and 12+ per cent in the fiscal 2011.

 

Nevertheless, the Indian economy appears to have bottomed out sometime in the third quarter of the fiscal 2013, even as the pace of recovery subsequently is pale and halting. Thus, the GDP growth rate of 4.8 per cent in the last quarter of the fiscal has marginally improved upon 4.7 per cent in the third quarter. Construction income expanded at 4.4 per cent, halting the decline in the rate from 7 per cent in the first quarter to around 3 per cent average in the next two quarters. Manufacturing also marginally bettered the 2.5 per cent rise of the third quarter. The ratio of gross fixed assets investment to gross domestic product at market prices (GDPmp) has improved to 32.6 per cent from 32 per cent in Q3, even as on Y-o-Y basis, it showed a decline.

 

The GDPmp, broadly the size of the domestic market, has crossed Rs 100 trillion to reach Rs 100.21 trillion, or around US$1.8 trillion during 2012-13.

 

Manufacturing Sector Developments

 
  • Pilatus, a Swiss aircraft maker, is planning to set up a facility which will initially manufacture airframes for its single-engine turboprop PC-12 aircraft
  • Tetra Pak has set up a new Rs 700 crore manufacturing unit at Chakan in Pune district of Maharashtra
  • The Central Government has received 12 investment proposals totalling Rs 5,000 crore from both, Indian and global companies under the M-SIP scheme from Electronics and Information Technology department
  • The Indian Oil Corporation (IOC) will invest Rs 11,000 crore in FY 13-14, on projects in the refinery, marketing, pipeline and petrochemical divisions
  • RGTL Industries has obtained the necessary clearances from the Rajasthan Government for its steel products unit at RIICO Industrial Area in Alwar district of Rajasthan

 

Infrastructure Sector Developments

 
  • Unity Infraprojects has received three major orders for various works in different states
  • The Road Ministry is planning to break the Kishangarh-Udaipur-Ahmedabad road project into two or more projects of smaller sizes
  • The Kerala Cabinet has given its approval for the 22.2 km long phase-I of the monorail project proposed for Thiruvananthapuram
  • JNPT is likely to invite fresh bids for construction of a fourth container terminal at Jawaharlal Nehru Port at Nhava Sheva, Maharashtra
  • MBL Infrastructure has received the operation and maintenance contract for a road project in West Bengal

 

Power Sector Developments

 
  • ONGC will to invite EoIs from potential partners in a joint venture for generating 6.5 GW of renewable energy such as wind and solar power
  • ONGC intends to set up an integrated gas processing plant in Maharashtra, entailing an investment of approx Rs 10,000 crore
  • Satluj Jal Vidyut Nigam (SJVN) has invited RfQs for the Hydro-electric Project at Uttarkashi district in the state of Uttarakhand
  • Tata Power will increase the capacity of its Mundra plant in Kachchh district of Gujarat
  • The Central Government plans to unveil Rs 43,000 crore green energy corridor project to facilitate the flow of renewable energy into the national grid

 

FDI Developments

  The Central Government has approved eight FDI proposals worth Rs 696 crore

 

Quote of the week:

 

M S Kapadia_ProjectsToday

"The economy appears to have bottomed out sometime in the third quarter of the fiscal 2013, even as the pace of recovery subsequently is pale and halting."

Dr. M S Kapadia, Director,
Economic Research India Pvt. Ltd.

 

 
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