Poor showing by the manufacturing sector pulled down the GDP growth to 5.5 per cent in the first quarter, the decade’s worst Q1 performance, prompting the government to press for quick decisions to boost investments.

Planning Commission Deputy Chairman Montek Singh Ahluwalia and Prime Minister's Economic Advisory Council (PMEAC) chairman C. Rangarajan and other experts, however, feel that situation would improve during the course of 2012-13.

The growth rate in the first quarter (April-June), according to the data released by the Government today, slipped to 5.5 per cent from 8 per cent in the corresponding period in the last fiscal, on account of flat growth in manufacturing, mining and quarrying sectors.

“ ...the decline of fixed investment is a source of concern to the government. It emphasises once again the need to take a quick decision to accelerate investment, especially removing all bottlenecks to investment in the manufacturing sector,” Finance Minister P Chidambaram said.

The growth rate on a sequential basis, however, was marginally better than 5.3 per cent registered in the fourth quarter (January-March) of last financial year.

“After continuous reduction in the growth rate in successive quarters beginning in the fourth quarter of 2010-11, this is the first time when quarterly growth rate has exceeded the growth rate in the previous quarter,” the Minister said.

The previous low in the first quarter was registered in 2002-03 when the economy clocked a growth rate of 5.2 per cent.

Commenting on the GDP numbers, Ahluwalia said, “The good news is that the quarterly growth rate has gone up from the 5.3 per cent in the last quarter (January-March) of previous financial year to 5.5 per cent in April-June quarter.”

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