Indian economy is likely to grow between 6.1% to 6.7% in 2013-14 as the downturn is more or less over and the economy is looking up. The Economic Survey 2012-13, tabled by Finance Minister P. Chidambaram in the Lok Sabha today observed that following the slowdown induced by the global financial crisis in 2008-09, the Indian economy responded strongly to fiscal and monetary stimulus and achieved a growth rate of 8.6 per cent and 9.3 per cent respectively in 2009-10 and 2010-11. However due to a combination of both external and domestic factors, the economy decelerated growing at 6.2% and an estimated 5% in 2011-12 and 2012-13. The Survey predicts that the global economy is also likely to recover in 2013 and various government measures will help in improving the Indian economy’s outlook for 2013-14. The slowdown in the rate of growth of services sector in 2011-12 at 8.2%, and particularly in 2012-13 to 6.6 percent from the double-digit growth of the previous six years, contributed significantly to slowdown in the overall growth of the economy. Some slowdown could also be attributed to the lower growth in agriculture and industrial sectors. But despite the slowdown, the services sector has shown more resilience to worsening external conditions than agriculture and industry.
For improved agricultural growth, the survey underlined the need for stable and consistent policies where markets play an appropriate role, private investment in infrastructure is stepped up, food price, food stock management and food distribution improves, and a predictable trade policy is adopted for agriculture. The Survey said, FDI in retail allowed by the government can pave the way for investment in new technology and marketing of agricultural produce in India. It said, fast agricultural growth remains vital for jobs, incomes and food security.

The survey calls for a widening of the tax base, and prioritization of expenditure as key ingredients of a credible medium term fiscal consolidation plan. It said, lower interest rates could provide an additional fillip to investment activity for the industry and services sectors, especially if some of the regulatory, bureaucratic, and financial impediments to investment are eased.
Dr. Raghuram G. Rajan, Chief Economic Adviser, Ministry of Finance noted in the introduction to the Survey that these are difficult times, but India has navigated such times before, and with good policies it will come through stronger. It said, slowdown is a wake-up call for increasing the pace of actions and reforms. The way out lies in shifting national spending from consumption to investment, removing bottlenecks to investment, growth, and job creation. Also through structural reforms, combating inflation both through monetary and supply side measures, reducing the costs for borrowers of raising finances and increasing the opportunities for savers to get strong real investment returns.