Slow reform progress to pull down GDP to 5.8% in 2013: ADB

Slow progress of economic reforms is expected to pull down India's growth to 5.8 percent in the 2013 calender year from 6 percent projected earlier, an Asian Development Bank (ADB) report said today.

"In India...slow progress in pushing through the reforms needed to ease business bottlenecks means growth is likely to be 5.8 percent this year, slower than the previously forecast 6.0 percent," the report 'Asian Development Outlook Supplement' said.

Meanwhile, Finance Minister P Chidambaram in Jaipur said today that India was likely to clock over 6 percent growth in the financial year 2013-14, in the backdrop of government taking host of steps to boost sagging economy.

India's growth fell to a decade's low of 5 percent in fiscal 2012-13.

ADB in April had projected a growth rate of 6 percent for India in 2013.

It further said the projected growth at 5.8 percent in 2013 will be "higher than the 5.0 percent posted in 2012, growth remains constrained by supply-side bottlenecks, as reflected in the continued slowdown in fixed capital formation, weakness in the industrial sector, and sluggish progress in pushing through badly needed structural reforms."

The growth rate, it added, is expected to accelerate in 2014 as slower inflation provides some scope for monetary easing that could boost investment and consumption.

"Growth will be further boosted by pre-election spending, and the pickup in US growth will support Indian tech companies and related service sectors", ADB said, adding, the US was likely to grow at 2 percent in 2013 and 2.6 percent in 2014. Elsewhere in South Asia, it said, Sri Lanka will continue to grow strongly, while other parts of the region will see softer-than-anticipated growth.

South Asia, it said, is expected to grow by 5.6 percent in 2013 and 6.2 percent in the following year. As regards China, ADB said, the country was likely to see 7.7 percent growth this year and 7.5 percent in 2014 after growth of 7.8 percent in 2012.