Economy likely to do better in 2012-13: Kaushik Basu​

New Delhi: India’s economy will likely grow faster next fiscal year than in 2011-12 because of an improved external environment and a shift in policy focus from containing inflation to growth, a top government adviser said on Wednesday.
However, chief economic adviser Kaushik Basu told the news agency in an interview that public finances were expected to remain under pressure in 2012-13.

Although the official forecast for 2012-13 is still to be released, some private economists now expect the annual economic growth to be below 7%, lower than 7-7.5% widely expected to for the year to end-March 2012. “I would forecast next year to be better than the present one,” Basu said, predicting growth in the current year of close to 7.5%, a pick up the following year and a return to “full-steam” growth of around 9% by 2013-14.
In December, the government slashed its full-year growth forecast for the current fiscal year to about 7.5% from 9% amid slowing domestic and global demand.
Gross domestic product (GDP) growth slowed to 6.9% in the quarter to end-September, its weakest pace in more than two years. Industrial output contracted in October for the first time in more than two years.
“The United States (US) is on a slow rise. Europe is still on the brink but if you ask me to bet, I would say, on balance it would escape falling into another recession,” he said.
“If these expectations are right, then I think India has enough fundamental strength that we will get out of the current slowdown and begin to move.”
(The Mint, 4 January, 2012)