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Indian economy's growth slumps to 6.5% in FY2012 from 8.4%
The robust growth story of the Indian economy has changed its path. As per the latest figure released by the the government of India the country's economy grew at the rate of 6.5% during the financial year 2011-2012 as against the vigorous growth of 8.4% in 2010-2011.

MOREOVER, IN the fourth and the last quarter of the previous financial year that ended on March 31, 2012 the economy saw a growth rate of only 5.3%, the lowest in the last last nine years as against the expected rate of 6.1%.


Economists, while speaking to merinews.com, said that the slump was expected due to the existing issues with productivity and decline in investment activities.

“It (fall in GDP) was expected. The only surprise is the decline in the agriculture numbers that came down to 1.7%. I was not expecting it,” said Siddharth Shankar, Cheif Economist at Kassa Financial Services.

“It was expected. Decline in the growth of investment activity has lead to fall in the GDP growth,” said Ila Patnaik, Professor at National Institute of Public Finance and Policy.

The economists expect an average growth rate of 5.5% during the first quarter of the current fiscal year.

“The economy may grow at the rate of 5-5.5% in the current quarter,” said Siddharth Shankar.

“It (economy) will grow at the rate of 5.5 – 6.5% during the current quarter,” said Ila Patnaik.

She suggested that to revive the economic growth it is required to make corrections in the fiscal deficit by reducing subsidy expenditure.

According to the latest GDP figures almost all the components of the economy have seen a downfall in the growth during the last fiscal year. The manufacturing sector has gone into negative zone to -0.3% during the last quarter from 7.6% and fell to the level of 2.5% in the full fiscal year.

The services sector grew by only 7.9% in the fourth quarter as compared to 10.6% last year, while the agriculture has declined by 1.7% from 7.5%.


Editorial NOTE: This article is categorized under Opinion Section. The views expressed in this article are solely those of the author and do not necessarily represent the views of merinews.com. In case you have a opposing view, please click here to share the same in the comments section.
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