Growth rate could decline to 6 per cent in Q3: Pronab Sen

Growth rate could decline to 6 per cent in Q3: Pronab Sen

Growth rate could decline to 6 per cent in Q3: Pronab Sen

Pronab Sen. File Photo

"It (Q3 GDP) could be 6 to 6.5 per cent", Pronab Sen, Chief Statistician of India and Secretary, Ministry of Statistics and Programme Implementation, told reporters when asked about the impact of drought on the third quarter growth rate.

The economy expanded by 7.9 per cent during the second quarter (July-September 2009-10) as compared to 6.1 per cent a quarter ago, reflecting the impact of the stimulus provided by the government to help the industry combat the adverse effect of the global financial meltdown.

"Q3 growth rate is expected to be quite significantly lower than Q2", Sen said, adding the impact of the monsoon failure and floods in different parts of the country would be reflected in the growth rate for the third quarter.

"As per the latest update, the farm production is likely to dip by 6 to 7 per cent during the third quarter", he told reporters after releasing the Annual Survey of Industries for 2007-08.

The agriculture sector growth rate during the second quarter slipped to below one per cent from 2.7 per cent a year ago in the same period.
Poor performance of the economy, as indicated by Sen, would have a bearing on the overall Gross Domestic Product (GDP) growth rate during the current fiscal.

Finance Minister Pranab Mukherjee had earlier said the economy could expand by 8 per cent during the current fiscal, as compared to 6.7 per cent a year ago.

The Mid-Year Review of the Economy, tabled by Mukherjee in Parliament earlier, had said the growth rate for the current fiscal could exceed 7.75 per cent.

The economic growth rate slipped from 9 per cent to 6.7 per cent during 2008-09, mainly on account of the impact of the global crisis which was triggered by fall of the Lehman Brothers in September 2008.

In order to help the industry to tide over the crisis, the Reserve Bank of India relaxed monetary policy, unlocking liquidity, and the government came out with three stimulus packages sacrificing Rs 1.86 lakh crore in revenue.

These initiatives did help the recovery process with the economy recording a growth rate of 7.9 per cent during the second quarter of the current fiscal, despite poor performance of the agriculture sector.

The real impact of the monsoon failure, however, is likely to be visible in the third quarter hitting the economic growth rate.