India's economic growth set to pick up in 2013 amid reform push

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India's economy is tipped to expand at a faster rate next year underpinned by the stellar reforms announced by the Indian government, said global research firm Dun & Bradstreet (D&B) in a report on Sunday.

Asia's third largest economy is tipped to expand by 6.8 per cent in 2013, significantly above the 5.5 per cent expected growth rate in 2012, the report added.

Improvement in policy conditions, revival in the investment scenario and easing inflationary pressures are likely to push India's economic growth higher in 2013, D&B said.

In fiscal 2011-12, India's economy grew at the slowest pace in nine-years at 6.5 per cent.

India's economy expanded at the slowest pace in three years last quarter as GDP grew by 5.3 per cent in the 2012 September ended quarter from the same period last year as a slowdown in the global economy amid the debt crises in Europe hit exports while high interest rates and elevated inflation crippled investment.

India's economic growth stood at a nine-year low of 5.3 per cent in the January-March quarter and 5.5 per cent in the next quarter.

However, industrial activity may see a revival in 2013, while services expansion may accelerate and a reform push may help spark a rebound in investment activity, , supporting economic growth.

The Indian government undertook some key economic reforms recently such as allowing FDI in multi-brand retail and aviation, hiking diesel prices, raising the FDI limit in insurance to 49 per cent and allowing FDI in the pension sector, reviving investor sentiment.

The RBI is also expected to loosen monetary policy from January 2013 amid easing inflationary pressures, bolstering investment outlook.

Story first published: Monday, December 31, 2012, 16:30 [IST]
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