I see the Indian economy certainly doing better in 2014 than in 2013.

With many of the recent policy actions expected to bear fruit next fiscal, Indian economy is likely to record 6-6.5 per cent growth in 2014-15.

The economy is expected to grow 5 per cent this fiscal.

Once the general elections are over, I believe there will be greater certainty in the environment and various policy actions already taken recently will have full impact in next fiscal.

PICK UP IN EXPORTS The recent pick up in exports will sustain in the next fiscal also.

The US Fed tapering coinciding with the strengthening of the US economy would enable us to sustain the pick up in our exports. Oil prices will remain moderate in 2014.

GOOD TIDINGS ON CAD India’s current account deficit (CAD) will come in at below 3 per cent of GDP in 2014-15.

However, value of gold imports next fiscal is expected to be higher.

CAD for the current fiscal is now projected to be below $50 billion, much lower than earlier estimated levels of $70 billion.

SOFTENING FOOD INFLATION Food inflation will soften and the December print expected in mid-January will confirm this trend.

The steep increase in vegetable prices was the main reason for the rise in food inflation.

But things have improved now and one finds that the prices of onions and other vegetables declining in recent days.

C. Rangarajan, Chairman of the Prime Minister’s Economic Advisory Council

For structural stability

The Indian economy has been able to address the transient challenges in 2013 owing to a set of strong administrative and policy measures. However, it is critical to impart structural stability to these improved macros, going into 2014. I underscore four spheres where adjustments must continue with vigour.

Fiscal management With FY14 fiscal arithmetic having not shaped up favourably so far, the first quarter of 2014 assumes greater significance to mobilise the budgeted proceeds from disinvestment, spectrum auctions, etc. In a similar vein, management of subsidies, notwithstanding the upcoming General Elections, must continue on priority.

In the long run, attainment of fiscal deficit targets through compression in productive expenditure is not sustainable and will only lower India’s potential growth. Hence, efforts must be made to downsize subsidies.

Consistent natural resources policy In the wake of the challenges posed by ban on mining activity, lack of availability of coal for power projects, India turning a net importer of iron ore – the need to evolve a transparent and a consistent policy for natural resource allocation (and utilisation) has amplified

Inflation While core inflation remains below long period average, headline inflation has surged owing to food related price pressures in the last few months. Dismantling of distributional bottlenecks and enhancement of storage and warehousing facilities remains the key besides raising agricultural productivity

External sector 2013 saw concerns on CAD abating owing to a combination of Government restrictions on gold imports and exports faring better. As conditions on the external account stabilise, unwinding of the distortionary measures must ensue in 2014.

Shubhada Rao, Senior President & Chief Economist, YES Bank

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