Growth In The Fourth Quarter To Be Much Better - March 2, 2009

Though the economy is struggling with the global economic slowdown but the Commerce and Industry Minister Kamal Nath is still confident that the growth of the country would pick up momentum in the last two months of this fiscal. Nath said "I believe the worst is over," by adding that the last two months of this fiscal would be much better in terms of growth.

Nath also said that the government was aware of the sluggish growth in the economy during the quarter ended December and that''s why the stimulus packages was announced. "We were seized... We did not know the figures but certainly we were seized that there is a sharp decline, that is why we did announce a stimulus package," said Nath adding that the measures have started yielding results.

The economy of India grew 5.3% for the quarter ended December from a year earlier, slowing from 7.6% in the previous quarter. The annual growth of India''s fiscal third quarter was lower than upwardly revised 8.9% annual expansion in the same quarter a year ago. The farm output in the December quarter fell an annual 2.2% as compared to a rise of 2.7% in September quarter. The manufacturing slipped an annual 0.2% in December quarter as against a growth of 5% in the September quarter. The construction grew 6.7% in December quarter as compared to 9.7% September quarter. The trade, hotels, transport and communication advanced 6.8% in December quarter vs 10.7% in September. The financing, insurance, real estate and business services gained 9.5% in Oct-Dec vs 9.2% in July-September.

India''s Fiscal Deficit Will Be Higher: Montek - Dec 08, 2008

Montek Singh Ahluwalia, Planning Commission Deputy Chairman on December 07 said India''s fiscal deficit for the current fiscal will be higher than budgeted for but this will not be an unfavorable development in the perspective of the global meltdown.

Higher fiscal deficit will be a desirable development, Ahluwalia said at a press conference here, soon after unveiling a growth stimulus package that includes a four percent cut in central value added tax (VAT).According to Finance Secretary Arun Ramanathan, the impact of the four percent cut in central VAT would be Rs 8,700 crore (Rs.87 billion/$1.75 billion).

A slowdown in tax receipts and the measures unveiled on December 07 are also expected to impact on the fiscal deficit, which was budgeted at 2.5 percent of gross domestic product for 2008-09 - 30 basis points lower than the 2.8 percent in the previous year. Aditionally, the government will also seek parliament''s approval for plan expenditure of another Rs.20,000 crore (Rs 200 billion/$4 billion) in the remaining four months of the fiscal.