The Finance Minister of India estimated that India would grow at the rate of 9 per cent in 2011-12. The projections were made despite the slowdown in the major European economies which were bound to affect India. The optimism could have been due to the result of high industrial output during the initial months of 2011 and rise in exports. But it all went wrong in the later months, Sept & Oct, of 2011. The rising exports took a 'U' turn & fell drastically. The tiny data entry error was blamed and with that, the GDP forecast came down from 9 per cent to 7 per cent by the year end.
Going by the current state of slowdown around the world, even 7 per cent looks too good to be true.
Predications were made for inflation levels and government maintained that it will come under control soon. After numerous efforts, which mostly involved adjusting the target dates, inflation came down to manageable levels only in December.
The case of fiscal deficit too threw up no new surprises. The government said in its budget that the deficit would be brought under control at 4.6 per cent of the GDP. With stock market down in the reds and government failing to meet its divestment targets, managing the gap looks extremely difficult.
The unrealistic projections and misses have made our economy look weaker and unmanageable. The expectations from 2012 are high but with trimmed growth and slowdown in the US and Europe; do not forecast any major surprises.