Pranab disappointed as economic growth slows down to 6.9%

New Delhi: Slowdown in agriculture and manufacturing is likely to pull down India’s economic growth to a three-year low of 6.9 percent in 2011-12 which Finance Minister Pranab Mukherjee described as “disappointing”.

The growth rate will moderate to 6.9 per cent from 8.4 percent in previous fiscal, according to advance estimates of national income released by the government today.

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“Though figures of advance estimates for GDP for the current fiscal somewhat look disappointing by our recent growth experience, considering the current global context and the slowdown in the domestic industrial sector in

particular, the growth performance is not all that surprising,” Mukherjee said.

Lower growth will also have implications on the fiscal deficit front, which is expected to exceed 4.6 per cent of the gross domestic product (GDP) due to rising subsidy bill, driven mainly by high prices of crude oil in global markets.

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According to experts, the fiscal deficit could be as high as 5.5 per cent.

The government had initially estimated a growth rate of 9 per cent for 2011-12. However, the projection was gradually scaled down to around 7 per cent by the government as well as the Reserve Bank, in view of various international and domestic factors.

India was growing at above 9 per cent before the global financial meltdown pulled down the growth rate to 6.7 per cent in 2008-09. It, however, recovered to 8.4 per cent in next two fiscals.

Reacting to lower growth projection, the BSE benchmark Sensex snapped its five-day winning streak and ended 85 points down at 17,622.45.

PTI