The Indian economy grew at 5.3 per cent in the Q2FY13. This is the third consecutive quarter in which GDP growth has hovered around this level. Industry continues to be the weak link as it grew at 2.8 per cent in Q2FY13. This is the lowest industry growth in Q2 since 2004. Manufacturing, impacted by policy hurdles and slowing consumption/investment demand, grew at just 0.8 per cent.
Services, the best performing among the three sectors, grew only at 7.2 per cent in Q2FY13, much lower than Q2FY12. Private consumption growth remained muted at 3.7 per cent due to depressed consumer sentiment and high interest rates. Exports witnessed a sharp slowdown reflecting weak global demand.
Given the global economic environment and the domestic policy hurdles, GDP growth is expected to remain subdued over the remaining quarters of this fiscal as well. We, therefore, expect GDP to grow at 5.5 per cent during FY13. Although government has announced some reforms and policy measures recently to revive growth, they will take a while to play out.