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Journalism of Courage
The Indian economy grew 6.9 per cent in July-September 2011,its slowest pace in more than two years,reflecting the adverse impact of a persistently high inflation,policy logjam that has hurt investments and the global crisis. While Finance Minister Pranab Mukherjee expected growth to be around 7.3 per cent in the full year,private research outfits projected the next two quarters to be worse.
The gross domestic product (GDP) slipped below 8 per cent for the third consecutive quarter due to a dismal performance by the manufacturing and mining sectors. While growth in manufacturing,that contributes 16 per cent to the GDP,slowed down to just 2.7 per cent due to high interest rates,mining contracted 2.9 per cent due to regulatory obstacles. In the previous quarter,the two sectors grew 7.2 per cent and 1.8 per cent,respectively.
Senior government functionaries,however,expressed confidence the economy would regain the lost momentum in the coming quarters. The growth performance is not all that disappointing… Going forward,(I am) confident that we will be recovering some of the loss in our growth momentum, Mukherjee told reporters. The GDP grew 7.7 per cent in April-June quarter this year and in 2010-11,it posted a robust growth rate of 8.5 per cent.
According to figures released by the government today,cumulative GDP growth in the first half (April-September) of 2011-12 moderated to 7.3 per cent from 8.6 per cent in the corresponding period last fiscal. The Reserve Bank of India has lowered its growth projection for the current fiscal to 7.6 per cent from its earlier estimate of 8 per cent given the global slowdown and high domestic inflation.
Chief Statistician TCA Anant said,Investors are nervous because of the global scenario and that is affecting India too. I dont think we are immune to uncertainties. He,however,maintained that recent policy decisions such as the national manufacturing policy would help improve sentiments. You will shortly see a revision in private investments,say in the next 3-6 months, he said.
Reflecting the poor business sentiments,investments growth dipped 0.6 per cent in the second quarter compared with a healthy clip of 7.9 per cent in the previous quarter. In the first two quarters of 2010-11,investments jumped in double digits at 11.1 per cent and 10.3 per cent,respectively.
What is worrying is the moderation in consumption expenditure that has been the growth driver. Private consumption slowed to 5.9 per cent compared with 6.3 per cent in the previous quarter and 9 per cent in Q2,2010-11.
The poor show by the industry also seems to be spilling over to the services sector. Although it grew at 9 per cent in July-September,it was lower than 10 per cent in the first quarter and 9.3 per cent in Q2,2010-11.
Growth in agriculture moderated to 3.2 per cent compared with 3.9 per cent in the previous quarter. With the kharif crop hitting the market soon,growth is most likely to pick up in the next quarter.
