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Why is Montek optimistic about the economic turnaround?

October 09, 2013 15:52 IST

MoneyIndia's gross domestic will see a turnaround in the coming quarters on account of various steps taken by the government to spur growth as well as good agricultural production, Planning Commission Deputy Chairman Montek Singh Ahluwalia said on Wednesday.

"Taking all these things together, I expect to see recovery in the coming quarters.

“Exactly how much it will produce is difficult to predict right now.

“But we are definitely on a turnaround path," Ahluwalia said.

He was speaking on the sidelines of 'Infrastructure Conclave 2013: Fast–Tracking Stalled Projects', organised by industry body PHD Chamber.

Ahluwalia said the government has taken steps to push the infrastructure sector and there are signs of improvement in the core sector production performance of steel, power, coal and cement during July and August.

He also said that India is going to have a good growth in agriculture this year which will help thrust the demand.

"We are going to have a good agriculture year. Good year agriculturally will not only directly contribute to the GDP, it will also generate income in rural areas that will stimulate non-agricultural GDP," he said.

India's gross domestic product growth had slipped to the lowest in four years at 4.4 per cent in the first quarter (April-June) of 2013-14, because of contraction in manufacturing activities and mining.

In 2012-13, the economic growth had slumped to decade low at 5 per cent.

"We did believe that the deceleration in growth which has occurred, is a short term phenomenon.

“I was hoping that you would see the turnaround as early as may be the last quarter of previous fiscal year.

“That hasn't happened.

“It didn't happen in the first quarter. . . But we are definitely on a turnaround path," Ahluwalia said.

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