New Delhi: Even as economic growth nosedived to 5.3% in the third quarter, the Finance Ministry on Friday said the rate is in line with expectations and the economy will expand close to 7% in the current fiscal.
“Broadly in line with our expectations.. will add up to close to 7% for the year as a whole...We are not very disappointed, we are not pessimistic about the number,” economic affairs secretary Ashok Chawla said.
He further said that the fourth-quarter contribution to GDP growth is normally better and the third quarter would be the worst for the entire fiscal.
On farm output, which registered negative growth in the third quarter, the finance ministry official said the rabi crop is expected to be better than normal.
“So all told our expectation is still that the fourth quarter is going to show robust growth, which will add up to close to 7% for the year as a whole,” he added.
He said public spending is already showing a substantial increase in terms of community, general services.
Amid low overall growth, community, social and personal services expanded by a robust over 17%.
“That (public spending) is taking the place of the decline in private sector spending (very quickly),” he said.
Chawla said the service tax cut by two percentage points should provide some kind of support and on the whole the service sector continues to be robust.