Photographs: Fayaz Kabli/Reuters.
Confirming fears of a slowdown, India's economy grew by just 7.8 per cent in the fourth quarter ending March this year, mainly due to poor performance of the manufacturing sector, as against 9.4 per cent in the same three-month period of the previous fiscal.
However, economic growth, as measured by the gross domestic product, improved to 8.5 per cent in 2010-11 from 8 per cent in 2009-10 due to better farm output and construction activities and financial services performance.
India's 2010-11 GDP at 8.5%; Q4 growth slips to 7.8%
Image: Farmers transport wheat crop on camels at Pipalgaon village on the outskirts of Allahabad.Photographs: Jitendra Prakash/Reuters.
Meanwhile, the GDP growth figures for the first and third quarters of FY'11 have been revised upward.
While the GDP growth figure for the first quarter has been pegged at 9.3 per cent -- as against the earlier estimate of 8.9 per cent -- the Q3 GDP growth has been revised upward to 8.3 per cent from 8.2 per cent.
India's 2010-11 GDP at 8.5%; Q4 growth slips to 7.8%
Image: An employee works inside a metal workshop in Kolkata.Photographs: Rupak De Chowdhuri/Reuters.
During the quarter ending March 31 this year, growth in the manufacturing sector slowed down to 5.5 per cent from 15.2 per cent in the same quarter of 2009-10.
In addition, the mining and quarrying sector grew by only 1.7 per cent during the quarter under review, as against 8.9 per cent in the fourth quarter of the previous fiscal.
India's 2010-11 GDP at 8.5%; Q4 growth slips to 7.8%
Image: Workers at LG Electronics India Pvt Ltd. assemble television sets inside a factory at Greater Noida.Furthermore, the trade, hotels, transport and communications segment grew by 9.3 per cent in the March quarter this year, as against 13.7 per cent expansion in the same the period of 2010.
However, services including banking and insurance grew by 9 per cent in the March quarter this year, compared to 6.3 per cent in the corresponding period last year.
India's 2010-11 GDP at 8.5%; Q4 growth slips to 7.8%
Image: A labourer winnows rice at a market yard at Bavla.Photographs: Reuters.
India's 2010-11 GDP at 8.5%; Q4 growth slips to 7.8%
Image: Labourers work at the construction site of a commercial complex.Though economic expansion slowed down in the fourth quarter, overall GDP growth touched the 8.5 per cent mark in 2010-11, as against 8 per cent in 2009-10, due the smart recovery in farm output.
India's 2010-11 GDP at 8.5%; Q4 growth slips to 7.8%
Image: Vendors sell their vegetables at an open air fruit and vegetable market.Photographs: Amit Dave/Reuters.
India's 2010-11 GDP at 8.5%; Q4 growth slips to 7.8%
Image: Traffic moves along a busy road in New Delhi.Photographs: Reuters.
India's 2010-11 GDP at 8.5%; Q4 growth slips to 7.8%
Image: A labourer works at the construction site of a grid power station in Jammu.Photographs: Reuters.
India's 2010-11 GDP at 8.5%; Q4 growth slips to 7.8%
Image: Hyundai i10 cars are assembled at a plant of Hyundai Motor India Ltd in Sriperumbudur.Photographs: Reuters.
India's 2010-11 GDP at 8.5%; Q4 growth slips to 7.8%
Image: RBI headquarters.Meanwhile, bankers on Tuesday said a slowdown in GDP growth to 7.8 per cent in FY 11's last quarter was on expected lines as the Reserve Bank and international agencies like the IMF had already hinted at a dip in growth.
"(It) is not something totally unexpected. It was clear (through) many of RBI's reports and international financial institutions had been hinting that the growth may not be same as last year," Central Bank of India's Chairman and Managing Director, S Sridhar, said. Looking at the possible slowdown in growth, banks have already taken the right steps, he said, adding that the RBI has also downsized the growth expectations both in advances and deposits in its annual monetary policy. With data released today confirming the fears of slowdown in growth, lenders and other agencies will have to take a "more nuanced" response, he said. Union Bank of India Chairman and Managing Director M V Nair said one should not read too much into the 7.8 per cent number as it is only a couple of notches below the RBI's forecast of 8 per cent.
India's 2010-11 GDP at 8.5%; Q4 growth slips to 7.8%
Image: A CPI-M activist beats a drum at a rally against rising prices.Photographs: Parivartan Sharma/Reuters.
The headline inflation for April 2011 was at 8.66 per cent. Sridhar also pointed out to certain positives like the forecast of a normal monsoon and a good show on the exports front.
"There is cause for optimism. There is no cause for pessimism at this stage just because the number has come down to 7.8 per cent," he said.
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