Slow growth in agriculture,mining and manufacturing is expected to pull down the GDP growth rate for 2011-12 to 6.9 per cent,its lowest in three years. The economy grew a robust 8.4 per cent the previous year. The fall is likely to put pressure on the Reserve Bank of India to reduce interest rates. The governments advance estimate is a shade lower than the central banks January projection of 7 per cent. According to the Central Statistical Organisation,agricultural growth is estimated to be 2.5 per cent against 7 per cent in 2010-11. Growth in mining and quarrying is estimated to decelerate 2.2 per cent and the manufacturing sector is likely to grow at 3.9 per cent as against 7.6 per cent last year. Finance Minister Pranab Mukherjee called the estimates disappointing,but added: I anticipate an upward revision when the full data for 2011-12 becomes available. The growth rate could be around 7.1-7.2 per cent with manufacturing doing better, added C Rangarajan,chairman of the Prime Ministers Economic Advisory Council. The slowing economy,however,doesnt augur well for the fiscal consolidation drive. The fiscal deficit for the year is likely to settle at around 5-5.5 per cent of the GDP,more than the budgeted 4.6 per cent. Analysts said the sub-7 per cent growth rate was in line with market expectations. What is worrying is that investments are down, Saugata Bhattacharya,chief economist,Axis bank,said.
