The economy recorded lower-than-expected growth of 5.3 per cent in the second quarter this fiscal, underscoring the urgency to go ahead with politically difficult reforms to spur revival.
The GDP number for July-September was weaker than the 5.5 per cent growth of the previous quarter, and substantially lower than the 6.7 per cent expansion recorded in the second quarter a year ago.
The persistent slowdown since early last fiscal has raised fears that annual growth could be pulled down to 5.5-6 per cent in 2012-13, which will be a decade’s low.
Growth weakness was visible in most segments except mining, construction and community, social and personal services, official data showed.
While mining output grew 1.9 per cent (-5.4 per cent), construction recorded 6.7 per cent (6.3 per cent). Community, social and personal services saw a growth of 7.5 per cent (6.1 per cent).
Things may improve
Economic growth for the first six months of the current fiscal stood at 5.4 per cent, lower than the 7.3 per cent clocked in the year-ago period.
Top policymakers like Prime Minister’s Economic Advisory Council Chairman C. Rangarajan, put the full-year growth forecast at 5.5-6 per cent.
This would be the slowest since 2002-03. The second half GDP performance this fiscal will be much better than the first half, according to Rangarajan.
The Finance Ministry on Friday said that the July-September quarter GDP growth rate of 5.3 per cent was below expectations.
Chandrajit Banerjee, CII Director-General, said the Q2 GDP growth of 5.3 per cent was very disappointing. “Reviving the investment climate and containing fiscal deficit must be top priority (of the Government)”.