In what is being interpreted by India Inc. as clear signals of a slowdown, the country's GDP (gross domestic product) growth during the first quarter this fiscal slipped to 7.7 per cent from 8.8 per cent in the April-June quarter of 2010-11.
The pull-down in economic growth to its lowest level over the past 18 months was mainly on account of the dismal show by the manufacturing and mining sectors during the three-month period.
‘Disappointing'
The reactions to the GDP data from various quarters were varied. While Finance Minister Pranab Mukherjee dubbed the slide in growth as “disappointing”, Prime Minister's Economic Advisory Council Chairman C. Rangarajan viewed the numbers as being in line with the 8.2 per cent growth set for the fiscal year.
Downward revision
On the other hand, citing the deceleration as a slowdown, industry chambers sought a pause in rate hike by the Reserve Bank of India (RBI) and argued that the growth rate for the first quarter of 2011-12 would have been lower still, but for the downward revision to 8.8 per cent from the initial estimate of 9.3 per cent for April-June quarter of 2010-11.
As per official data, overall economic growth in April-June this fiscal was primarily pulled down by the manufacturing sector which grew by a paltry 7.2 per cent as compared to 10.6 per cent notched up during the same quarter of 2010-11.
Queering the pitch further was the mining and quarrying sector which posted a dismal 1.8 per cent growth as compared to 7.4 per cent in the same quarter of the previous fiscal.
As a consequence, the 7.7 per cent growth in April-June this fiscal has turned out to be the lowest after the 7.3 per cent increase recorded in the October-December quarter of 2009-10.
