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Q2 FY13 GDP grew at 5.3% versus 5.5% in Q1: ET Now poll

NEW DELHI: The Gross Domestic Product (GDP) for the second quarter of the current financial year likely grew at 5.3%, a tad lower than 5.5% in the first quarter, says an ET Now Poll. The consensus estimates of the poll range between 5% to 6%. 

The agricultural sector of the economy may have grown at 2.8% versus 2.9% in Q1. While the industrial sectorgrew at 0.7% versus 0.8%, the services sector growth is may have remained at 7.4% like the previous quarter.

Agricultural growth is expected to have remained low owing to poor kharif crop. According to the poll, the mining sector output would have been better in the second quarter and the electricity output would have remained strong. 

The participants of the poll estimated a growth rate range of 5.5-6.5% for GDP of the entire fiscal year and acknowledged the need for more action on policy front by government. 

Economists forecast that the FY13 fiscal deficit will overshoot the government target of 5.3%. High current account deficit will continue to impact the rupee. 

India's economy could gather pace in the new year, putting behind a dismal year, Goldman Sachs said in a report released on Thursday. Goldman Sachs said Indian economy is expected to expand 6.5% in 2013 thanks to an improvement in external demand and pick-up in reforms, and further accelerate to 7.2% in 2014. 

Its upbeat assessment was based on "easing financial conditions, in part driven by some reduction in policy rates, a continuation of reforms boosting confidence, and a normal agricultural crop." 

The investment bank pegged 2012 growth at 5.4% and listed a number of measures to accelerate the economy. 

"While allowing FDI in retail, the Goods and Services Tax, direct cash transfer of subsidies, and dedicated freight corridor will help, we believe further reforms on fiscal consolidation, financial liberalisation and infrastructure growth will be needed to sustain an improvement in trend growth," the note said. 

However, the investment bank warned that the near-term outlook was "difficult" because of weak growth, high inflation, and the twin deficits - fiscal and current account - that makes a quick recovery in investment cycle "unlikely".