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Apex industry bodies have called for bold action from the Government and the Reserve Bank of India to reverse the economic conditions that are in the throes of a serious slowdown.
The latest numbers released on Thursday reported a growth of 5.3 per cent for January-March 2011-12, taking the GDP growth to 6.5 per cent for the year. This is lower than the earlier advance estimate of 6.9 per cent.
‘Cut rates'
Reacting to the numbers, Mr Chandrajit Banerjee, Director-General, CII, said, “Repo rate and CRR cuts are called for as also measures to kick-start the investment cycle, since growth in capital formation has been negative for the last few months. Accelerated depreciation has to be considered to ensure that companies are induced to invest.”
The services sector clocked a growth of 8.9per cent in 2011-12, and continues to be the key sector driving GDP growth. Minus the services, the GDP registered a growth of just 3.1per cent in 2011-12.
Gross capital
Dr Rajiv Kumar, Secretary-General, FICCI, said “The manufacturing sector growth has slumped to (-) 0.3per cent in the fourth quarter and 2.5 per cent for the year as a whole. This will severely pull down services sector growth in the coming quarters.”
Gross capital formation registered a growth of 5.3 per cent in 2011-12 compared with the 11.1per cent last year. “This shows a grave crisis of investor's confidence. We may be in the danger of slipping in to a 1991 like crisis. This must be averted at all costs,” said Dr Kumar.
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