Deceleration in growth has bottomed out: Montek

With economy showing signs of revival in the second quarter of this fiscal, Planning Commission Deputy Chairman Montek Singh Ahluwalia said on Saturday that the deceleration in gross domestic product growth has bottomed out.

"In the first quarter of this financial year, GDP growth was 5.5 per cent, while in last quarter of last financial year it was 5.3 per cent, so it can be said that deceleration in growth has bottomed out," Ahluwalia said on the sidelines of CII-Invest North conference in Gurgaon.

Indian economy grew at a nine-year low rate of 5.3 per cent in January-March quarter in the last financial year and also in the last fiscal at 6.5 per cent.

The economy showed signs of recovery when it grew by 5.5 per cent in the April-June quarter of 2012-2013.

Annual growth in the eight core sector industries more than doubled to a seven-month high of 5.1 per cent in September on good production in coal, cement and petroleum refinery sectors.

Showing signs of turnaround,  industrial production measured in terms of Index of Industrial Production grew by 2.7 per cent in August, reversing the trend of contraction witnessed during the previous two months.

He said the recent steps taken by the government to revive sentiment and growth momentum in the economy will start showing results by January.

"Most of the actions that government of India has taken on reforms will show result by January," Ahluwalia said.

On the oft-repeated charges of delay in decision making hurting growth prospects, Ahluwalia said that now officials are extra cautious and wary of fast decision making which is harming growth.

"The central government is trying its best to remove that delay in decision making and private sector should effectively help the government in this,"  he said.

He also said that power is an essential component of growth and the government hopes to address all issues related to coal linkages and fuel supply to power plants by the end of this year.

He also said the recent decision to roll back hike in non-subsidised LPG prices was not a move that would stall the ongoing reform momentum.

Image: Montek Singh Ahluwalia