GDP Growth Rate Declines to 5.3% in 2nd Quarter

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TNI Bureau: The Indian economy has registered its gross domestic product (GDP) growth by 5.3 per cent in the July-September period of the current financial year (2012-13) due to poor performance of manufacturing and agriculture sectors. The GDP had increased by 6.7 per cent in the same period of last fiscal. It had grown by 5.5 per cent in the first quarter (April-June) of 2012-13.

According to the Central Statistical Organisation reports, the manufacturing sector grew marginally by 0.8 per cent in the second quarter, against 2.9 per cent growth in the same period of 2011-12, Farm sector output expanded just 1.2 per cent in the July-September period this fiscal against 3.1 per cent in the same period last year.

Mining and quarrying sector, however, showed some improvement and recorded a growth of 1.9 per cent during the quarter against a contraction of 5.4 per cent in the second quarter of 2011-12.

The economic growth in the first six months of this fiscal (April-September) is 5.4 per cent, lower than 7.3 per cent growth clocked in the year-ago period.

In the July-September quarter, trade, hotels, transport and communications segment also witnessed lower pace of growth at 5.5 per cent compared to 9.5 per cent expansion in the same quarter in year ago.

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The growth rate of electricity, gas and water supply also dipped to 3.4 per cent in the second quarter, from 9.8 per cent witnessed in the same quarter of 2011-12.

The construction sector expanded 6.7 per cent Q2 of 2012-13 against 6.3 per cent in the year-ago period.

Growth rate of the services sector, including insurance and real estate, stood at 9.4 per cent in the second quarter, against 9.9 per cent recorded in same quarter last fiscal.

For country like India, a growth rate below 6 percent for the third quarter in a row will definitely weaken the aspiration to get the double-digit growth and face challenges to provide jobs for its burgeoning population.

Nevertheless, analysts say India needs to take more steps quickly, including speeding up approval for infrastructure projects, overhauling the tax system and reducing its swollen deficit to revive capital investment.

In fine, Indian economy, which is considered as Asia’s third largest economy, is still growing faster than many other major economies, but it has slowed from 6.5 percent in the 2011/12 fiscal year and 8.4 percent in the previous two fiscal years.

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