The Global Economic situation does hit Export groth but India will manage ith a 3.6% CAD or just $67.1 B from the current PMEAC Economic Report being read out by CEA C Rangarajan and it is a telling statement on what India would be at this bottom of the secular Global Economic cycle. The GDP is near $2 T, the Fiscal Deficit forecast still a little conservative one thinks at 5.06% and includes probably disinvestment and auction revenues for E&P in energy which seem to have dried up but the report sems a realistic assessment of India’s Economic performance and not just potential. Growth in the report looks at 6.7% for FY2013 and that would indeed be a super achievement for us.
The trade deficit will be close to but below 10% with the overhang of budgetary restriction on Gold and Oil imports down almost 20% each and the current surpluses otherwise at 6.1% for the 3.6% deficit. GDP growth of 6.7% points out that poor performance from Farm sector at just 0.5% is a factor. The PMEAC also recommendsa diesel hike in three phases and the Retail and Aviation FDI as a factor promoting the degrowing investment and savings, down below 30%
The PMEAC State of the Economy report expects Industrial growth to pick up in the second half of the Fiscal.