Govt lowers GDP estimate to 6.9 per cent

New Delhi, February 7, 2012

The economic growth is likely to fall to a three-year low of 6.9 per cent in 2011-12, mainly due to sharp slowdown in manufacturing, agriculture and mining sectors, against 8.4 per cent expansion in the last fiscal.



Agriculture and allied activities are likely to grow at 2.5 per cent in 2011-12, compared to a robust growth of 7 per cent in 2010-11, according to the Advanced Estimates released on Monday by the Central Statistical Organisation (CSO).



Manufacturing growth is also expected to drop down to 3.9 per cent in this fiscal from 7.6 per cent last year.



The CSO’s gross domestic product (GDP) growth projection is a tad lower than the 7 per cent forecast made by the Reserve Bank of India in its quarterly monetary policy review last month.



In its mid-year Economic Review, the government had also pegged growth at around 7.5 per cent. The current estimate is a sharply lower than the 9 per cent growth projection for 2011-12 made by the government in its pre-Budget survey in February last year.



The latest GDP growth estimate of 6.9 per cent for the entire fiscal means that the pace of economic expansion slowed in the second half of 2011-12, given that GDP growth in the April-September, 2011, period stood at 7.3 per cent.



According to the advance estimates, mining and quarrying is likely to witness a decline of 2.2 per cent, compared to a growth of 5 per cent a year ago.



Growth in construction is also likely to slip to 4.8 per cent in 2011-12, against an 8 per cent in 2010-11.



Furthermore, the finance, insurance, real estate and business services sectors are likely to grow by 9.1 per cent this fiscal, against 10.4 per cent last fiscal.