Thursday, December 1

GDP slips down to 6.9% - Red Signal for India Inc

Giving indications of what could possibly be the beginning of yet another slowdown, the economic growth fell to a nine-month low to 6.9 per cent for the July-September period, on the back of rising interest rates and global uncertainty mainly on account of the Eurozone crisis.

Experts said, in the present scenario Government needed to fast-track reform policies and take measures to attract massive investments so that GDP growth did not affect the next fiscal.

The gravity of the situation can be gauged from the very fact that during the corresponding quarter of the last fiscal, the economy had grown at 8.4 per cent. Add to this, the Finance Minister Pranab Mukherjee himself painted a gloomy picture of the near future.

“Now, hard days are coming. Present uncertainty with regard to global situation is creating concerns about FII and FDI flows. We will continue to adjust our policies according to the developments,” he said.

Although Mukherjee said the performance was not “all that disappointing” in view of the global uncertainty and high inflation, Planning Commission Deputy Chairman Montek Singh Ahluwalia projected moderation in growth rate in 2011-12 to 7-7.5 per cent, down from 8.5 per cent in the previous fiscal.

Despite the Finance Minister’s efforts to downplay the situation, the figures, as per the data released by the Government gave away the real picture.

Growth in eight infrastructure industries, an important indicator, plunged to 0.1 per cent in October this year from 7.2 per cent in the same month a year ago.

The October figures on the core sector, which accounts for about 38 per cent of the industrial production, convey a dismal outlook of the economic growth.

Source: The Pioneer

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