India's 6.9% GDP at a three year low vs 8.4% last fiscal

New Delhi: India’s gross domestic product (GDP) is estimated to grow an annual 6.9 percent in the 2011/12 fiscal year, a government statement said on Tuesday, citing provisional estimates.

The estimated figures of 6.9 percent growth in 2011-12 is a three-year low, mainly due to a sharp slowdown in manufacturing, agriculture and mining sectors. India’s economy grew at 8.4 percent each in the previous two fiscal years, revised data from the government showed.

Agriculture and allied activities are expected to grow at 2.5 percent in 2011-12, compared to a robust growth of 7 percent in 2010-11, according to the Advanced Estimates released today by the Central Statistical Organisation (CSO).

More from Economy

Inflation likely to be a big focus area for budget 2024, say sources Explained: Will the Bank of Japan break tradition and raise interest rates?

Manufacturing growth is also expected to drop down to 3.9 percent in this fiscal from 7.6 percent last year. The CSO’s GDP growth projection is a tad lower than the 7 per cent forecast made by the Reserve Bank of India in its quarterly monetary policy review last month.

In its mid-year Economic Review, the government had also pegged growth at around 7.5 percent. The current estimate is a sharply lower than the 9 percent growth projection for 2011-12 made by the government in its pre-Budget survey in February last year.

[caption id=“attachment_205834” align=“alignleft” width=“380” caption=“The latest GDP growth estimate of 6.9 percent for the entire fiscal means that the pace of economic expansion slowed in the second half.Reuters”]  [/caption]

The latest GDP growth estimate of 6.9 percent for the entire fiscal means that the pace of economic expansion slowed in the second half of 2011-12, given that GDP growth in the April-September 2011, period stood at 7.3 percent.

According to the advance estimates, mining and quarrying is likely to witness a decline of 2.2 percent, compared to a growth of 5 percent a year ago. Growth in construction is also likely to slip to 4.8 percent in 2011-12, against an 8 percent in 2010-11.

Furthermore, the finance, insurance, real estate and business services sectors are likely to grow by 9.1 per cent this fiscal, against 10.4 percent last fiscal.

PTI and Reuters