The Central Statistical Organisation (CSO)’s advance estimates of 5% GDP growth this fiscal comes as a big downer indeed.
That’s around 50 basis points short of consensus readings. While growth in the first-half (Apr-Sep) has been estimated at 5.4%, what CSO’s arithmetic means is an implied growth of 4.6% in the second half. It will be an ugly print, if it comes true, and this is not DNA’s case either.
And there are ample signs of the economy doing far better -- such as the trend in Purchasing Managers’ Index for services. Also, India’s consumption story is moving at a decent tick despite the slowdown.
To be sure, the CSO has extrapolated data before November 2012, so it’s just a statistical verdict and not based on ground reality. In any case, the CSO is not known for accurate predictions.
The upshot, nevertheless, is clear: India needs to open the floodgates of investment, have policies that lower the cost of doing business, and pump-prime.
Social repercussions of below-trend growth can be devastating. Politicians had better get down to work in a bipartisan way. The economy is a confidence game, not a con game. Do the due.