GDP growth rate slips to 5.3 percent, sharpest dip in 9 years

Indian GDP witnessed a growth rate of 5.3 percent in the forth quarter of 2011-12 according to figures released by the Central Statistical Office. Union Finance Minister Pranab Mukherjee on Thursday disclosed the figure that was really alarming and even worst than the last quarter's 6.1%.

In a statement on 'Revision in GDP Growth for 2011-12' and fourth quarter GDP estimates, Mukherjee said: "The GDP growth at constant prices for 2011-12 has been revised downwards to 6.5 per cent as against the Advance Estimate of 6.9 per cent released in February 2012."

"This mirrors the quarterly trend in growth. The 2011-12 fourth quarter growth has been estimated at 5.3 per cent. These are disappointing figures in the context of our recent performance but have to been seen in the light of overall global developments," he added.

Pranab sited the major reasons for this massive slowdown as the tight monetary policy leading to a significant rise in the interest costs and the weak global sentiments that affected growth in domestic private investment.

"The domestic investment sentiments may have been also affected by the environmental policy bottlenecks in the mining sector," he added.

Proclaiming that most of these factors have sorted out, Mukherjee said: "The rate cycle has been reversed; mining sector growth has turned around, progress has been made on fuel linkage for coal based power projects; there is a turnaround in the investment (Gross Fixed Capital Formation) growth rate in the fourth quarter, which had been negative in the preceding quarters of 2011-12; and a normal south west monsoon has been predicted for 2012-13.?

" There are no major adverse results on corporate performance in the last quarter of 2011-12. All these factors should help in the recovery of growth momentum," he added.

Emphasizing that the Government would definitely take all necessary steps required to overcome the imbalance on the fiscal front and on the current account, Mukherjee said: "It would help in checking inflationary expectations and inspire confidence for improved capital flows as well as recovery in domestic investment growth."

-With inputs from ANI