The government has linked the economic growth with recovery in the large-scale manufacturing sector in financial year 2012-13 which can capitalize upon its existing idle capacity, say an official.
However, the agriculture sector also needs to sustain the existing growth momentum and prospective candidate to steer the growth are wheat and rice in the major crops and many minor crops like fruits and chilly.
According to an official, the macroeconomic and political instability combined with natural disasters are impeding economic recovery. The economy offers room for optimism especially when lot of idle capacity is lying in the economy which means only small injection of investment could reinvigorate growth momentum. The growth outlook depends on industrial revival which in turn hinges upon energy sector reforms. The affordable and uninterrupted energy supply can kick-start much needed momentum in the economy.
In fiscal year 2012-13 acceleration in the growth is envisaged through improvement in productivity and competitiveness. Public investment though conditional cash grants will be directed towards improvement of skills and entrepreneurship through Entrepreneur and Youth Development Fund.
Official further said that cities will be better managed through inclusive zoning and Urban Challenge Fund to create space for private investment and construction, foster domestic commerce, regional clusters and generate jobs. Markets will be reformed through strengthening legal and regulatory framework to foster competition.
Connectivity to people and place will be improved starting from reforming railways supported by PSDP through cash contingent grant. On the front of governance and delivery of public service, the capacity of civil service will be enhanced through robust training and leadership & performance enhancement skills, performance based remuneration and carried advancement. Result Based Management (RBM) will be introduced gradually in public institutions where funds are to be allocated on the basis of performance and results.
It is pertinent to mention here that the growth of Gross Domestic Product (GDP) for 2012-13 is targeted at 4.3 per cent with contributions from agriculture, manufacturing and services of 4.0 per cent, 4.1 per cent and 4.6 per cent, respectively. Nominal GDP is targeted to grow by 15.3 per cent and GNP per capita is projected at Rs.136, 885. The growth is subject to risks like deterioration in energy availability, extreme weather fluctuations, and fiscal profligacy. The underlying assumption for inflation is 9.5% per cent which is consistent to fiscal prudence and tightening.