The numbers are terrible with negative surprises and the seriousness of which can be understood by the fact that in Q4FY12, the economy has recorded a growth of 5.3 percent compared to 5.6 percent in Q3FY09, the period when the global economy was going through a steep turmoil/crisis.The Central Statistical Organisation (CSO) has revised the overall growth rate for 2011-12 to 6.5% from 6.9% estimated earlier.
The figures come against the backdrop of adverse global environment and domestic woes arising out of high interest rates and policy inaction, experts said.Overall industrial growth at 1.9 percent is again one of the slowest in its history. Within the sector, the manufacturing sector contracted 0.3 percent in the fourth quarter against a growth of 7.6 percent in the year-ago period. Weak industrial production numbers released on a monthly basis already indicated the feeble industrial growth in the January-March quarter. Additionally, sluggish domestic demand and uncertain global environment contributed to the crack in industrial growth.
Construction activities also slowed down to 4.8 percent against 8.9 percent a year ago. 'Electricity, gas & water supply' did not provide any respite and growth for this sub-sector came in at 4.9 percent against 9 percent in the previous quarter and 5.1 percent in the year-ago period. The only silver lining has been the robust show by the mining and quarrying sub-sector, which clocked a growth of 4.3 percent after contracting in last three quarters, but was useless due to a minimal contribution in overall GDP growth.
The "disappointing" growth, as Finance Minister Pranab Mukherjee described it, comes after the Gross Domestic Product (GDP) registered a growth of 8.4% for two consecutive fiscal years -- 2009-10 and 2010-11.
The data has also forced Chairman of Prime Minister's Economic Advisory Council (PMEAC) C Rangarajan to lower the outlook for the current fiscal to 6.5-7% against the government projections of 7.5%.
Industry was quick to demand a revival package from the government and easing of interest rates by the Reserve Bank of India which is scheduled to review the credit policy on June 18.
Within few hours of Mukherjee promising "all necessary steps" to check the economic slide, his ministry came out with a slew of austerity measures, including restrictions on foreign travel by the government functionaries and ban on creation of new posts.
The HSBC headlined its India report as "A gasping elephant".
Throwing clear signs of slowdown continuing in the current fiscal, the growth rate of eight core infrastructure sectors like coal, cement, electricity, oil, and steel, halved to 2.2% in April against 4.2% a year ago.