THE investment climate has been on a low due to the lack of affirmative action in tax reforms in areas like mining, land, insurance, pensions, banking, taxation etc. along with high interest rates have come in the way of investment growth. This observation has been made by the Credit Analysis and Research Limited (care ratings).

Care has also stated that the fiscal deficit for current financial year will not meet the target of 4.6% of GDP; that it would be higher on account of revenue slippages and excess expenditure. Care Ratings has predicted that a gradual recovery could be expected in the economy in 2012-13, provided various underlying assumptions remain rooted. The government's deficit will be critical according to CARE as it will have to be a growth oriented budget but at the same time easing of rates and liquidity will be in accordance with broader monetary policy goals of inflation.