Maharashtra’s growth rate loses steam under sustained inflationary pressure
Rising prices of commodities, inflation will continue to play havoc in lives of ordinary citizens even this year. Dashing hopes of a revival of the economy, the state government has projected the economic outlook to remain sluggish at least till the later part of this financial year. Under sustained inflationary pressure, the state’s growth rate lost steam in 2011-12.
The statement on fiscal policy for the new year has predicted “some pickup” in the state economy only towards the later half of the financial year. The statement is circulated as part of budget documents. With crude prices continuing to rise in international markets, it has said that the union government could revise fuel prices in the near future, which will increase inflationary pressure. Uncertainty in currency markets and global recession trends could worsen the situation further, the statement indicates.
It claims that RBI’s move to contain inflation by raising cost of funds to institutions and general public (loans) has impacted sales of properties and vehicles. The European crisis is yet to abate and there is a renewed tension pertaining to crude oil rich Iran, the report further states.
With all these forces at play, signs of recovery continue to be fragile. The state has estimated a. fiscal deficit of 1.72 per cent of the Gross State Domestic Product in 2012-13.