GROWTH PROJECTION 
REDUCED TO 5.3 %

PMEAC painted a gloomy picture for the Economy and asked the RBI to keep Interest Rates unchanged till the Currency stabilises...The same people made former RBI Governor Duvvuri Subbarao scapegoat for the slowdown in the economy. Is this not double talk...Even the economy is showing clear signs of slowdown it said till date that Agri growth would be better this year and we can achieve motr than 6 percent growth in the financial year 2013-14. Now it has reduced the growth projection from 6.4 percent to 5.3 percent...It means that PMEAC reduced the growth projection by 1.1 percent at one go...The PMEAC should be thrown to dustbin for misguiding the economy with its wrong calculations periodically...It seems to be a rehabilitation center for ex Bureaucrats who are old in age and could not predict any shocks in time...They are surviving under the veil of Economists ...It is the bad luck of our Indian Economy... The news is as follows...

Prime Minister's Economic Advisory Council today lowered the growth forecast for the current fiscal to 5.3 per cent from 6.4 per cent projected earlier. in April projected 6.4 per cent growth for Indian economy for current financial year. The GDP grew by 5 per cent in 2012-13.

"Economy will grow at 5.3 per cent in 2013-14," Prime Minister's Economic Advisory Council (PMEAC) Chairman Rangarajan said while releasing the Economic Outlook for 2013-14. He listed out host of measures including further liberalisation of FDI norms to improve economic condition.

As regards rupee, he hoped "at the current level (it) is well corrected. Stability is returning to the foreign exchange market. As capital flows return and as CAD begins to fall, this tendency will strengthen".
However, he added the current stance of monetary policy should continue until stability in rupee is achieved. The rupee has lost over 20 per cent since April and had touched a life time low of 68.86 to a dollar on August 28. It is currently trading at 63.78 to a dollar.

The PMEAC expects the agriculture sector to grow by 4.8 per cent in the current fiscal up from 1.9 per cent, while the industrial growth has been pegged at 2.7 per cent as against 2.1 per cent in 2012-13.

The growth of services sector, however, is projected to decelerate to 6.6 per cent in current fiscal from 7.1 per cent a year ago. Admitting that rupee depreciation will put some pressure on inflation, Rangarajan said "On balance, WPI inflation by end March 2014 will be around 5.5 per cent as against the average of 7.4% in 2012-13 and 5.7 per cent for March end 2013".
The wholesale and retail inflation widened in recent months primarily on account of higher weightage of food items in CPI. The retail inflation in August stood at 9.52 per cent, while the WPI numbers in July was at 5.79 per cent.

Net Capital flows are projected to fall to USD 61.4 billion in 2013-14 against an estimated USD 89.4 billion in 2012-13 putting pressure on the country's forex reserves.