India eyes rebound as economy grows 4.7pc
New Delhi, May 31, 2014
India's economic growth picked up marginally from a decade low in the fiscal year ending March, but pro-business Narendra Modi's thumping victory in the recent general election has stoked optimism of an investment-led turnaround in the coming quarters.
Asia's third-largest economy grew 4.7 per cent in 2013/14, slower than an official estimate of 4.9 per cent and higher than 4.5 per cent growth a year earlier. It marks the second straight year of sub-5 per cent growth - the worst slowdown in more than a quarter of a century.
Economic growth for the quarter to end-March came in at 4.6 per cent from a year earlier, compared with 4.8 per cent estimated by analysts in a Reuters poll and a revised 4.6 per cent growth in the previous three months.
"We are not able to yet see how the economy will grow but certainly the mood is upbeat," said AM Naik, chairman at the country's biggest engineering firm Larsen & Toubro, who expects growth to pick up to 5.5 per cent this fiscal year.
Growth stuck below 5 per cent is disappointing for an economy that boasted of a near double-digit economic expansion until a few years back and was widely expected to be one of the main drivers of the global economic recovery.
It also poses a challenge for the new government to generate enough job opportunities to employ the 10 million people who enter the country's workforce every year.
New Delhi reckons the economy needs to grow 8 per cent a year to prevent a demographic disaster.
Modi won India's first outright parliamentary majority in three decades with a pledge to boost growth and create jobs, raising hopes among investors for a turnaround led by spending on infrastructure. Ninety-three per cent of chief executives in a poll carried out by one of India's industry chambers FICCI said they expect a substantial improvement in the near-term economic situation after the election of a strong government.
"It is likely the infrastructure projects which have been held up for a long time. They will hopefully begin to move. We will see the impact of it more like in August and September, because it takes time for things to move," said Naik.-Reuters