The last quarter GDP growth at 5.3% is really some thing that should jolt the govt and put it on high alert. The FY 11-12 closed with growth of 6.5% and may be taken in stride as the world’s economic condition was not conducive for India to have performed at a higher level than this. Particularly because the inflation and high interest were continuously acting to disadvantage for the industry. The RBI remained tied handed and the result was that the inevitable happened.
Now is the time that the Indian Economic elephants is given conditions to march in its elegant style and characteristic gait. The June month review should therefore be a looking at giving further push to easy money policy.
The problems emanating from Europe are difficult to assess and counter for India but I think we should not be lagging behind in our normal economic activity and should take required steps as the situation emerges. Pranab Da has announced non-plan outlays to be cut by 10% and this is never going to be bad. The international Brent Crude prices have come down below $100/bbl and that is also good for us.
The reports are that China is also faltering in the growth path but still that should not deter us from keeping the bar high.