The government's Mid-Year Economic Analysis has lowered the GDP growth projection this year to 5.7-5.9 %, the lowest in ten years. This is also substantially lower than the 7.6 % projected in the Economic Survey.
However, the Mid-Year Economic Analysis has some positives. The report says that the slowdown has bottomed out and the economy is set for higher growth in the second half of 2012-13. It projected the growth rate at 6.0 % in the second half of 2012-13 compared with 5.4 % in the first half.
For achieving near 6% growth, “both fiscal and monetary policies should support us to sustain the investor confidence. The government has to address the supply side bottlenecks too,” the report added. It also estimated the Current Account Deficit (CAD) to be lower than it was in 2011-12. The CAD touched a record 4.2 % in 2011-12, while it is expected to be 3.7% in the current fiscal.