NEW DELHI – India’s economy expanded at its slowest pace in a decade last fiscal year, adding to pressure on the government to speed up economic reforms.
Government figures released Friday showed that growth for the 12 months ended March 31 slowed to 5 per cent, far below the 8 per cent rate the country has averaged in the past 10 years.
For the January-to-March quarter of 2013, growth sank to 4.8 per cent compared with 5.1 per cent in the same period a year earlier.
The latest figures confirm the fears of analysts that high inflation, weak consumer spending, and delays in economic reforms have dampened investment in the Indian economy.
Prime Minister Manmohan Singh told reporters that he expected the economy to pick up pace in the coming months as his government pursued “pro-growth policies.”
“We will see inflation coming under greater control and the space for growth-promoting activities also increasing,” Singh said Friday.
Similarly optimistic predictions made by Singh in the past have not managed to stop the economy’s slide.
His fractious coalition government remains mired in a series of corruption scandals, while angry opposition parties continue to disrupt Parliament, further holding up urgent economic reforms that could help spark a rebound.
The main opposition Bharatiya Janata Party was quick to attack the government after the release of the latest figures.
“Mismanagement, misrule and non-governance has resulted in the dismal growth rate,” said BJP spokesman Prakash Javadekar.
Montek Singh Ahluwalia, the deputy chairman of India’s Planning Commission, said the situation was likely to improve as steps taken recently by the government to improve power supply and remove infrastructure bottlenecks came into effect.
“We’ve taken a number of actions in the last two or three months, such as sorting out supply problems of coal, fuel prices, which are about to have an impact,” Ahluwalia told reporters. “In all probability these actions will take some time before they have their full impact,” he said.
Industry leaders say much more needs to be done to remove hurdles to growth, including easing land acquisition, speeding up environmental clearances for projects and securing power supplies.
That view was seconded by economic experts.
“Growth is not expected to pick up noticeably until we enter the latter half of the fiscal year when, hopefully, structural reforms have progressed further and the global backdrop is more benign,” said Leif Lybecker Eskesen, HSBC Chief Economist for India and Southeast Asia.