NEW DELHI: Planning Commission deputy chairman Montek Singh Ahluwalia on Wednesday said he remains optimistic that India's economy is on a "turnaround path" and that there will be recovery in the coming quarters. The comment came hours after theInternational Monetary Fund scaled back the country's growth projection for the current fiscal to 3.8% from 5.6% projected earlier.
Ahulwalia said his optimism stems from the recent measures taken by the government, particularly in the infrastructure sector. This is despite the fact that infrastructure projects worth Rs 12.5 lakh crore remain held up for want of various clearances. "The government has taken steps to push the infrastructure sector and there are signs of improvement in the core sector production performance of steel, power, coal and cement during July and August," he said on the sidelines of Infrastructure Conclave 2013, organised by industry lobby PHD Chamber.
"Besides, India is going to have a good growth in agriculture this year, which will help thrust the demand." Ahulwalia said in the light of all these, he sees the economy regaining health soon. "Taking all these things together, I expect to see recovery in the coming quarters. Exactly how much it will produce is difficult to predict right now. But we are definitely on a turnaround path," he said.
Ahulwalia said that a good year agriculturally will not only contribute to the GDP growth directly, but it will also generate income in rural areas that will stimulate non-agricultural GDP.
Meanwhile, Commerce and Industry minister Anand Sharma too has questioned IMF's growth forecast for India. "I reject the IMF numbers. The Indian economy is seeing a turnaround both in terms of growth in manufacturing and domestic demand and a buoyancy in exports. It is encouraging to see that trade deficit is also progressively coming down," Sharma said in a statement.
The Planning Commission had earlier said that the economy will grow by 5%-5.5% in 2013-14. The country's GDP growth, however, slipped to the lowest in four years at 4.4% in the first quarter of the fiscal because of contraction in manufacturing activities and mining.
In 2012-13, the GDP growth had slumped to a decade low of 5%. Elaborating on the role of the Cabinet Committee on Investment, Ahluwalia said the committee is not empowered to overrule a ministry, but if a ministry delays its decision then the cabinet committee can pre-empt the matter and give its decision.
