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NCAER’s quarterly seminar on “State of the Economy” and Forecast for 2012-2013

GDP growth is projected at 7.3 per cent.

WPI based average inflation rate is forecast at 6.5 per cent.

Fiscal deficit for the centre is estimated at 5.3 per cent of GDP.

Growth rate of exports (US$) is estimated at 13.2 per cent on account of declining world real GDP growth rate in current year as compared to the previous year.

Imports (US$) are estimated to grow at 19.3 per cent on account of lower domestic GDP growth.
Current account deficit is estimated to remain at 3.2 per cent of GDP.

New Delhi, April 27, 2012: At a seminar held today at the National Council of Applied Economic Research (NCAER) on “State of the Economy” the following observations, review and projections for 2012-13 were made by the Council, through a presentation and release of their quarterly report titled “Quarterly Review of the Economy”:

The growth prospects for agriculture in 2012-13 will hinge on the performance of monsoon. Early indications from the reports from agencies such as Indian Institute of Tropical Meteorology suggest that southwest monsoon is expected to be 'largely' normal this year.

Surplus in grain stocks is expected in the coming year. By the end of June this year, the food the food grain stocks with the government may reach 75 million tonnes. Managing these stocks will be a challenge for the government.

The signals from the price trends in milk, fruits & vegetables, eggs, meat & fish and oilseeds is that improvement on the supply side of these commodities are necessary for meeting the supply- demand gap.

Industry and Services

Over the last financial year the manufacturing and mining sectors significantly slowed down with mining growth rate dipping in negative category.

The growth rate in the electricity sector jumped up from 5.4 per cent in 2010-11 to 8.7 per cent in 2011-12.

Capital and intermediate goods grew at negative growth rates in 2011-12. Except steel and crude petroleum, all other sectors’ growth rates in core infrastructure industries showed improvement in 2011-12.

The growth rate of services GDP with construction excluded stood marginally higher (8.9 per cent) as compared to when it is included (8.7 per cent) in 2011-12:Q3.

A major segment of services GDP, viz., 'trade, hotel restaurants, and transport storage and communication' accounts for nearly 27 per cent share in total GDP. Its growth rate decelerated to 9.2 per cent during Q3:2011-12 as compared to 9.9 per cent increase in Q3:2010-11.

External Trade
The merchandise exports in April-December 2011-12 touched $221.8 billion compared with $173.2 billion in the corresponding period of last year posting growth of 28 per cent.

Imports have grown by 29.5 per cent and touched $354.3 billion.

The performances of two major categories of services, viz. software and business services, which used to extend major boost to India's net earnings from service exports have slowed down.

The current account deficit is touching close to 4 per cent of GDP in 2011-12 due to slow export growth and rising import bill.

The gross FDI inflows posted impressive increase 38.4 per cent in April-December 2011 and touched $35.9 billion compared with $26 billion in the corresponding period of 2010.

FII activity has been less brisk in April-December 2011 compared with the corresponding period of 2010 - the FII inflows at $130 billion were 36 per cent less and the corresponding outflows at $127.2 billion were less by 26.7 per cent.

Money and Capital Markets

A combination of increasing policy interest rates, adverse impact on spending on investment or consumer durables, and the weak global demand conditions affected investment outlook and also reduced growth of demand for credit even as the inflation rate declined in December.

Reflecting slower growth of the economy, growth of bank credit to commercial sector fell, the growth of bank credit to the government increased.


Inflation rate has declined but rise in the prices of Crude Petroleum, Fuel & Power, Milk, Eggs, Meat & Fish continues unabated in double digits.

Public Finance

Fiscal deficit has fallen from 8.9 per cent in Q4: 2010-11 to 4.3 per cent in Q3: 2011-12.

The revenue collection from all major tax items has been growing in Q3:2011-12 over Q3:2010-11 except for excise and other smaller tax items (Securities Transaction Tax, Banking Cash Transaction Tax, Fringe Benefit Tax, Wealth Tax etc.).

Net non-tax revenue increased by 41 per cent in Q3:2011-12 compared to corresponding quarter of the previous fiscal.

The central government spent merely 1.7 per cent of GDP on capital account (plan and non-plan combined) in Q3:2011-12, while expenditure on revenue account (plan and non-plan combined) was 11.2 per cent of GDP.

GDP Forecast for 2012-13




NCAER Forecast for


April 2012

% Change YOY

Real GDP

- Agriculture

- Industry

- Services


Exports ($ value)

Imports ($ value)

Inflation (WPI)

% of GDP at Market Prices

Current Account Balance*

Fiscal Deficit (Centre)

Note: Forecast Based on Annual Model. * Surplus (+)/deficit (–)


Contact Information

  • Name: Shikha Vasudeva


    Telphone: -- , -