<p>India's economic growth likely slowed to a near decade-low at the end of last year as high interest rates hit factory activity, according to economists polled by Reuters who don't expect a pickup in investment before May elections.<br /><br /></p>.<p>The poll of 36 economists, conducted February 19-25, predicted Asia's third-largest economy grew 4.9 per cent over a year ago in the three months to December, similar to the 4.8 per cent rate in the previous quarter.<br /><br />That is a shadow of the close-to-double-digit growth rates in recent years and is a signal of the problems gripping Indian factories, which are weighed down by high interest rates and declining consumer demand.<br /><br />Industrial output contracted during October-December 2013, led by steep fall in capital and consumer goods production.<br /><br />“High borrowing costs necessitated by elevated inflation, coupled with subdued demand, have kept manufacturing and investment interest on the back foot," Radhika Rao, economist at DBS Bank said.<br /><br />A stalled investment cycle due to uncertainty over government policy has pushed many infra projects onto the back burner in recent years.<br /><br />That situation is unlikely to improve soon and all 22 economists who answered an extra question said they didn't expect any substantial improvement in investment before general elections in May.<br /><br />The poll also showed economists were split down the middle on whether Union Finance Minister P Chidambaram's estimate of containing the fiscal deficit at 4.6 per cent of the gross domestic product was achievable, given the prevailing economic conditions.<br /><br />While 11 out of 22 economists said that Chidambaram's estimate is ‘about right’, an equal number said he was being optimistic. The concern, though, is on the roll-over of subsidies.<br /></p>
<p>India's economic growth likely slowed to a near decade-low at the end of last year as high interest rates hit factory activity, according to economists polled by Reuters who don't expect a pickup in investment before May elections.<br /><br /></p>.<p>The poll of 36 economists, conducted February 19-25, predicted Asia's third-largest economy grew 4.9 per cent over a year ago in the three months to December, similar to the 4.8 per cent rate in the previous quarter.<br /><br />That is a shadow of the close-to-double-digit growth rates in recent years and is a signal of the problems gripping Indian factories, which are weighed down by high interest rates and declining consumer demand.<br /><br />Industrial output contracted during October-December 2013, led by steep fall in capital and consumer goods production.<br /><br />“High borrowing costs necessitated by elevated inflation, coupled with subdued demand, have kept manufacturing and investment interest on the back foot," Radhika Rao, economist at DBS Bank said.<br /><br />A stalled investment cycle due to uncertainty over government policy has pushed many infra projects onto the back burner in recent years.<br /><br />That situation is unlikely to improve soon and all 22 economists who answered an extra question said they didn't expect any substantial improvement in investment before general elections in May.<br /><br />The poll also showed economists were split down the middle on whether Union Finance Minister P Chidambaram's estimate of containing the fiscal deficit at 4.6 per cent of the gross domestic product was achievable, given the prevailing economic conditions.<br /><br />While 11 out of 22 economists said that Chidambaram's estimate is ‘about right’, an equal number said he was being optimistic. The concern, though, is on the roll-over of subsidies.<br /></p>