On expected lines for the government, though disappointing for India Inc., the country’s gross domestic product (GDP) growth rate slid to 4.8 per cent in the fourth quarter (January-March) on account of dismal performance by the three major sectors — agriculture, manufacturing and mining — to end the entire 2012-13 fiscal at the decade’s lowest expansion of five per cent.
Having notched up a 5.4 per cent growth in the first quarter of 2012-13, 5.2 per cent in the second quarter, and 4.7 in the third, the 4.8 per cent increase in the fourth quarter was significantly lower than the 5.1 per cent expansion in the January-March quarter of 2011-12 when the GDP growth for the entire financial year was at 6.2 per cent.
Planning Commission’s Deputy Chairman Montek Singh Ahluwalia felt there was a sign of the economy bottoming out, but not of a strong recovery. “There is evidence that the economy has bottomed out. But we still don’t have evidence of a strong recovery. It is challenging to get to six per cent [growth] where last quarter is 4.8 per cent.”
The only positive cue is that the grim GDP numbers appear to have brightened the prospects of a rate cut by the Reserve Bank of India (RBI) in June and a probable easing of the cash reserve ratio (CRR). Stock markets tumbled on Friday as the dismal growth story rattled investors, with the Bombay Stock Exchange 30-share sensitive index, Sensex, plunging by 455 points to end the day at 19760.30.