Third quarter growth rate disappointing, says finance minister

Finance Minister Pranab Mukherjee termed the third quarter GDP number of 6.1 per cent as “disappointing” but expressed the hope that economy is expected to register  a growth of 7 per cent for the entire fiscal.

“No doubt, it is disappointing 6.1 per cent... but not unexpected,” he said. “If, I take first quarter, second quarter, third quarter taken together, it is also indicating a downward trend,” he said.

“But as you know that the CSO has given the full advance estimates that is around 6.9 per cent, we also expect it around 6.9 or 7 per cent,” he said.

Impacted by high interest rates and global demand slowdown, Indian economy grew at 6.1 per cent, the slowest in over two years, prompting corporates and experts to press for faster reforms to boost industrial output. The economic growth rate in October-December 2011 declined mainly due to poor performance of manufacturing, mining and farm sectors. The economy had expanded by 8.3 per cent during the corresponding quarter a year ago.

The falling growth rate may prompt the Reserve Bank to cut rates at its mid-quarterly policy review on March 15. The Finance Minister too is expected to announce steps to arrest contraction in growth in the Budget for 2012-13, to be presented in the Lok Sabha on March 16.

According to the data released by CSO, growth of the manufacturing sector during the quarter decelerated sharply to 0.4 per cent from 7.8 per cent during the same period a year ago. Farm sector output registered a growth 2.7 per cent, down from 11 per cent in Q3 of the last fiscal.