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| Economy grows at 5.3% in Q3 | | |
New Delhi, Feb 27: Impacted by the global economic meltdown, the Indian economy has clocked its slowest quarterly growth in over five years, at 5.3 per cent, in October-December period of this fiscal.
Despite a stimulus package, growth in the economy was brought down by a fall in growth in the agriculture and manufacturing sectors.
Against the whopping 8.9 per cent growth in the same period a year ago, economists said it is now the Reserve Bank's turn to provide stimulus to the economy by cutting rates, as inflation is already down to 3.36 per cent.
While the fall in manufacturing, by 0.2 per cent, in the third quarter was expected, as was evident in negative industrial production numbers for October and December, contraction in farm output by 2.2 per cent was a bit surprising.
"What has come as a surprise is agriculture. There is a turnaround but we can be optimistic that the figures will improve," Chief Statistician Pronab Sen said.
For the nine months of this fiscal, the economy grew by 6.9 per cent against nine per cent a year ago, which may make it difficult to attain the 7.1 per cent growth this fiscal, as was pegged officially.
The Government put up a brave front, saying the third quarterly growth is not much off the mark.
"We had maintained seven per cent with a downward bias. That much has been said, but (there is) still a quarter to go. Even with 5.3 per cent, it still comes around seven per cent, maybe a shade below that," Minister of State for Finance P K Bansal said here.
However, others are not as sure about the possibility of attaining 7.1 per cent growth this fiscal. "It is unlikely that the growth is going to be 7.1 per cent (for the entire 2008-09)," Sen said.In December, the Government provided the first stimulus package, cutting excise duty by four per cent across the board and increasing planned expenditure by Rs 20,000 crore among other things.However, stimulus packages, also provided in January, and then the Interim Budget, would take some time to work their way through the system, economists said."(The) Government will not be able to achieve over 7 per cent growth. The stimulus packages will take 6-8 months (to lift the economy) and (it will take) 8-9 months to get about 7 per cent (growth)," Crisil Principal Economist D K Joshi said.
It was only services that provided a silver lining to the otherwise gloomy situation on the growth front.
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