India can expect between 7.7 and 7.9 percent Growth in 2012-13
Date: Wednesday , February 01, 2012
India's economy is expected to expand by between 7.7 and 7.9 percent in 2012 - 2013; down from 8.5 percent in 2010 says World Economic Situation and Prospects (WESP), a joint product of the Department of Economic and Social Affairs, the United Nations Conference on Trade and Development and the five United Nations regional commissions. The report shows that this slowdown is not a local phenomenon but only a part of the global picture. This growth rate of India, even though lukewarm, is far better than that the developed world can expect and is only behind the forecasted growth rate of China. The global economy as a whole has witnessed a sluggish growth in 2011 and is expected to go through a similar phase in 2012.
It points out that the country is unlikely to meet its deficit target. Owing to economic growth boosted tax revenues and the sale of 3G telecommunications licenses increased non-tax revenues, India’s fiscal deficit declined to 5.1 percent of GDP in the fiscal year 2010-2011. Still, due to the lower growth rate and on-hold disinvestments in state run companies, it is highly unlikely that the Government manages to achieve the target of 4.7 percent of GDP for the fiscal year 2011 – 2012, says the report. It is also forecasted that India and Sri Lanka will manage to generate more jobs in this timeframe than any other South Asian counterparts.
The report also said that recession in either Europe or the United States might not be enough to cause another global recession, but a collapse of both economies most likely would. In the pessimistic scenario of the United Nations forecast for 2012, the economy of the EU would decline by 1.5 percent and that of the United States by 0.8 percent, this would be a tight blow to the developing economies. Asian developing countries, particularly those in East Asia, would suffer mainly through a drop in their exports to major developed economies, while those in Africa, Latin America and Western Asia, along with the major economies in transition, would be affected by declining primary commodity prices, said the survey.