India's GDP falls to 6.7% in FY09

The declining output of the manufacturing sector pulled down the economic growth rate in the fourth quarter of 2008-09 to 5.8 per cent and 6.7 per cent in the entire fiscal.

Impacted by the global financial crisis, manufacturing sector output during the fourth quarter (January-March) dipped by 1.4 per cent against an increase of 6.3 per cent in the corresponding period a year earlier.

As regards the entire 2008-09, industrial output growth decelerated sharply to 2.4 per cent from 8.2 per cent in the previous fiscal.

India recorded a GDP growth rate of 9 per cent during 2007-08. GDP growth in the fourth quarter of 2007-08 was 8.6 per cent.

The Central Statistical Organisation (CSO) in its advance estimates had projected a growth rate of 7.1 per cent. When contacted, Planning Commission Deputy Chairman Montek Singh Ahluwalia said, "This was expected."

Agriculture and allied sectors during the fourth quarter recorded a growth rate of 2.7 per cent as compared to 2.2 per cent in the corresponding period of the previous fiscal.

The growth rate of the trade, hotels, transport and communications sector more than halved to 6.3 per cent from 13.8 per cent during the fourth quarter in 2007-08.

Contrary to expectations, the construction sector recorded a growth rate of 6.8 per cent during the quarter, which is nearly the same as in the corresponding period in the previous fiscal.

The growth rate of the mining and quarrying sector dipped to 1.6 per cent as compared to 4.7 per cent during fourth quarter in 2007-08.

As far as 2008-09 is concerned, the GDP growth rate at 6.7 per cent is smaller than the CSO's advance estimate of 7.1 per cent but the same as projected by the Reserve Bank of India.

The central bank in its annual monetary policy for the current fiscal projected a growth rate of 6.5-6.7 per cent for 2008-09.

As regards the sectors, the agriculture and allied sector growth rate slipped to 1.6 per cent during the fiscal as compared to 4.9 per cent in the previous financial year.

The manufacturing sector growth rate during 2008-09 declined sharply to 2.4 per cent from 8.2 per cent in the previous fiscal.

Besides poor showing by manufacturing, the growth rate of the construction sector too decelerated to 7.2 per cent during 2008-09 from over 10 per cent a year ago.

But for the mining and quarrying industry, all other segments of the economy witnessed deceleration in growth rates.

Mining and quarrying sector output rose to 3.6 per cent from 3.3 per cent in the previous fiscal.