Dr C. Rangarajan, chairman of the Prime Minister’s Economic Advisory Council, said the 2013 calendar year will be better than 2012, led by a reversal in the pessimistic sentiment in the industrial sector and an increased pick-up in investment.
Inflation can touch 7 per cent in the first half of 2013, Dr Rangarajan told NDTV Profit today.
India's current account deficit widened to a record high at 5.4 per cent of gross domestic product in the September quarter as export growth slowed more sharply than imports, with a similar gap expected in the December quarter likely to prolong weakness in the rupee.
The worse-than-expected deficit also adds pressure on the government as it tries to push through long-delayed reforms to stave off a sovereign rating downgrade due to the country's high deficit on both the current and fiscal accounts.
A sharp rise in gold imports, a hefty oil bill and falling exports due to the global slowdown have kept India's current account deficit at persistently high levels.
India ran a balance of payments deficit of $158 million for the July-September quarter, against a surplus of $521 million in the previous quarter and compared with a surplus of $276 million a year earlier, the RBI data showed.
The current account deficit was $22.3 billion in the three months through September, or 5.4 percent of GDP, compared with $16.6 billion in the June quarter and $18.9 billion in the September quarter of 2011.
Economists expect the current account gap to remain above 5 per cent in the December quarter.
India's April-November fiscal deficit rose to 4.13 lakh crore rupees, or 80.4 per cent of the budgeted target for the fiscal year ending in March, casting doubt on the government's pledge to mend its finances following a higher-than-budgeted expenditure bill.
The rupee was the third worst performer in Asia in 2012, even though net inflows into Indian stocks were the highest in the region. The rupee closed 2012 at 55.00.
Gross domestic product growth for the current fiscal year is expected to be 5.7-5.9 per cent, the slowest since 2002/03, and Prime Minister Manmohan Singh said last week that a five-year government plan for 8 per cent expansion was "ambitious.
(With inputs from Reuters)