India’s GDP growth hits a decade low of 5.5 per cent

Gross domestic product (GDP) of the country grew at 5.5 per cent in the first quarter of the current financial year (April-June 2012-13), the lowest in a decade, pulled down by poor showing by the manufacturing sector, prompting the finance minister to press for quick decisions to boost investments.

Planning Commission deputy chairman Montek Singh Ahluwalia and Prime Minister's Economic Advisory Council (PMEAC) chairman C Rangarajan and other experts, however, feel that the situation would improve over the course of the fiscal.

India's GDP at factor cost at constant (2004-2005) prices for April-June 2012-13 has been estimated at Rs13,06,276 crore, as against Rs12,38,738 crore in Q1 of 2011-12, showing a growth rate of 5.5 per cent over the corresponding quarter of the previous year.

During the quarter, the highest growth rate was recorded by the construction sector, which grew at 10.9 per cent, followed by the finance, insurance, real estate and business services sectors, which grew at a combined 10.8  per cent and community, social and personal services sectors, which grew 7.9 per cent year-on-year.

Among other economic activities, agriculture, forestry and fishing grew at 2.9 per cent, mining and quarrying by 0.1 per cent, manufacturing by 0.2 per cent, electricity, gas and water supply by 6.3 per cent and trade, hotels, transport while communication grew 4.0 per cent during the quarter.

In the agriculture sector, production of cereals recorded a growth of 3.5 per cent during the Rabi season of agriculture year 2011-12 (which ended in June 2012) over the production in the corresponding season of previous agriculture year. Production of wheat increased by 8.1 per cent during the Rabi season of agriculture year 2011-12, while rice production registered a decline of 16.6 per cent. Among commercial crops, oilseeds production declined by 12.6 per cent during the Rabi season of 2011-12, while production of cotton and sugarcane recorded growth rates of 6.7 per cent and 4.5 per cent, respectively, during agricultural year 2011-12.