JOIN USTerming the second quarter economic growth rate of 5.3 per cent as "below expectations", Finance Minister P Chidambaram on Friday said it was mainly due to scanty rainfall and poor showing by the manufacturing sector.
"Overall, the growth rate is below our expectations," Chidambaram said in a statement after the official data showed that GDP growth fell to 5.3 per cent in July-September period. The gross domestic product (GDP) had expanded by 6.7 per cent in the same period of last fiscal. In the April-June period of 2012-13, the economic growth rate was 5.5 per cent.
During the three-month period ended September 30 this year, farm sector output expanded by just 1.2 per cent, against 3.1 per cent in the same period last year. "The reduction in growth in agriculture and allied sectors has been on account of rainfall being lower than normal, particularly in June-July. The impact on the khariff crop has pulled down the growth rate," Finance Minister Chidambaram said.
‘Clarion call for reforms process’
Federation of Indian Chambers of Commerce & Industry
The depressing second quarter GDP growth numbers is a clarion call to take the reform process ahead and implement the announcements in “right earnest” so as to put the economy on a growth trajectory, according to the President of FICCI, R V Kanoria.
State Bank of Mysore
The sluggish second quarter GDP growth is bound to adversely impact the government’s revenue collection, the immediate fallout would be two-fold, according to State Bank of Mysore MD, Sharad Sharma. “The government will be forced to step up its borrowing programme and this in turn will reduce the scope for interest rate coming down,” he said. In his view, the slowdown does not show any sign of abating and now that the festival season is almost over, overall demand is not likely to pickup.
Barclays
The average growth rate for the three quarters of this fiscal will hover around 5.4 per cent, based on the recently released second quarter GDP growth rate, according to a report by Barclays’ Emerging Markets Research, even as it said that the slowdown won’t soften the RBI’s stance in December to review CRR or repo rate cut.