India's Q4 GDP grows by 5.3% vs 9.2% YoY
India's economic growth faltered further in the last three months of the fiscal year 2011-12, as the manufacturing sector registered a decline in output and agriculture growth slowed even as the services sector held its own. A sticky inflation, aggressive monetary tightening by the RBI, policy stalemate and a global slowdown have crimped corporate investments and consumer spending over the course of FY12.
The Gross Domestic Product (GDP) grew by 5.3% in the January to March quarter of FY12 from the year-ago period, after expanding by 6.1% YoY in the third quarter, the Government said in a statement today. India's GDP growth in the second quarter stood at 6.7% while the same in the first quarter was at 8%. India's GDP grew by an impressive 9.2% in the fourth quarter of FY11. Economists had forecast a GDP growth of 6.1% in Q4 FY12. This is the lowest GDP growth in nine years. The Indian economy expanded by 6.5% in the year ended March 31, 2012 as against the Government's provisional forecast of 6.9%, the CSO data showed today. India's GDP grew by 8.4% in FY11. The Government expects India's economy to grow by 7.6% in FY13...Read More
Manufacturing, Agriculture drag down FY12 GDP: CARE Ratings
The Central Statistical Office (CSO) has released revised estimates of GDP for Q4 FY12 and annual estimates for the fiscal year FY12. There has been a downward revision in GDP growth rate, from 6.9% (advance estimates) to 6.5% (revised estimates) in FY12, consequent on muted performance in manufacturing and the services segment of hotels, transport and communication.
Annual Estimates – GDP growth in FY12
Overall GDP growth has slowed down from 8.4% in FY11 to 6.5% in FY12, with growth in mining being negative and growth in manufacturing being as low as 2.5% in FY12 (as against 7.6% in FY11)
Agriculture has registered considerable decline in growth from 7.0% in FY11 to 2.8% in FY12. This may be treated as a high base effect rather than dismal growth as foodgrain production has been robust, touching record highs, owing to favourable monsoons in FY11 (especially, after the drought of 2009-10). The negative growth registered in the Mining and Quarrying sector is a signal towards need for policy reforms in this sector. This is particularly driven by lower production activity in the coal and crude oil segments. Manufacturing has clearly showed signs of deceleration in FY12, with IIP moderating to 2.8% in FY12, as against a high of 8.2% in the previous year. The interest-rate sensitive sector of financing, insurance, real estate and business services has registered a decline in growth from 10.4% in FY11 to 9.6% in FY12, as a result of monetary tightening in most part of FY12...Read More
Most negative factors have bottomed out: FM on GDP data
Following is the text of the statement made by Finance Minister, Pranab Mukherjee on ‘Revision in GDP Growth for 2011-12’ and fourth quarter GDP estimates:
"The, Ministry of Statistics and Programme Implementation has released the revised estimates of national income for the financial year 2011-12 and the quarterly estimates of Gross Domestic Product (GDP) for the fourth quarter (January-March) of 2011-12. The GDP growth at constant prices for 2011-12 has been revised downwards to 6.5 per cent as against the Advance Estimate of 6.9 per cent released in February 2012. This mirrors the quarterly trend in growth. The 2011-12 fourth quarter growth has been estimated at 5.3 per cent. These are disappointing figures in the context of our recent performance but have to been seen in the light of overall global developments.
Among the factors that have contributed to the slowdown are the tight monetary policy that led to a significant rise in the interest costs and the weak global sentiments that affected growth in domestic private investment. The domestic investment sentiments may have been also affected by the environmental policy bottlenecks in the mining sector. Most of these factors have bottomed out. The rate cycle has been reversed; mining sector growth has turned around, progress has been made on fuel linkage for coal based power projects; there is a turnaround in the investment (Gross Fixed Capital Formation) growth rate in the fourth quarter, which had been negative in the preceding quarters of 2011-12; and a normal south west monsoon has been predicted for 2012-13. There are no major adverse results on corporate performance in the last quarter of 2011-12. All these factors should help in the recovery of growth momentum. The Government would take all necessary steps to address the imbalance on the fiscal front and on the current account. It would help in checking inflationary expectations and inspire confidence for improved capital flows as well as recovery in domestic investment growth."...Read More
GDP growth slips below 2008 crisis level : CRISIL
GDP growth reached a record low of 5.3% in the 4QFY12, dragging the overall FY12 GDP growth to 6.5%. This is significantly lower than the advance estimates of 6.9% released earlier and is also lower than the 6.7% GDP growth witnessed in FY09 after the global financial crisis. Industry continues to be the most stressed sector as it grew at a mere 3.4% in FY12, mainly due to the degrowth in mining and tepid growth in manufacturing sector. Though the services sector grew at a robust 8.9% in FY12, its growth has fallen below 9% mark for the first time since 2004-05. Private consumption growth dropped sharply to 5.5% in FY12 as compared to 8.1% in FY11.
Hurt by the policy logjam investment demand dropped to 5.5% in FY12 as against 7.8% in the previous fiscal. Further, exports growth also dropped to 15.3% in FY12 as against 22.7% in FY11 due to weak global environment. Our GDP forecast for FY13 although is currently at 7.0%, we are in the process of revising it due to significant increase in downside risk to GDP and would be releasing the same next week...Read More
IMC: 4% agri growth in 12th Plan crucial to Indian economy
The Indian Merchants’ Chamber organized a panel discussion on Monday, May 28th to discuss key issues related to growth in the agriculture sector and challenges to be surmounted in the process. The distinguished panel of speakers included Mark Kahn, VP, Godrej Agrovet, Dr. Gyanendra Shukla, Director, Monsanto, Ms Jayashree Reddy, DGM, SBI and Mr. G Chandrashekhar, Chairman, Agri Business & Food Processing Committee, IMC. The panel discussed the challenges faced by the Indian agricultural sector and also recommended result oriented strategies to achieve the objective of Faster, Sustainable and More Inclusive Growth as incorporated in the proposed 12th Five Year Plan. Ms. Bhavna Doshi, President, IMC, stated that this theme of the 12th FYP also coincides with IMC’s current year theme of "Inclusive Innovation". Hence the need of the hour is promote the growth of agriculture and allied industries. Dr. Mahendra Dev, Director & VC, IGIDR, Mumbai – Chief Guest at this panel discussion, stressed on the need to incentivize the price policy to facilitate diversification. He also focused on the necessity for market reforms and de-risking agriculture. He said that due importance should be given to capacity building for farmers, research and development, quality control, rural infrastructure and export promotion. The diverse board of panelists examined various aspects - from ‘farm to fork’, covering input-output markets, infrastructure, role of technology, finance, land constraints, water shortage and climate changes, etc which play a crucial role in the agriculture sector.
Mark Kahn spoke about an important and interesting aspect of agriculture and allied industries- ‘livestock industry’. He emphasized on the participation of the private sector into the sectors like dairy, poultry, and oil palms. Dr. Gyanendra Shukla deliberated on the significance of enriching the soil nutrients and need for advancement of bio-technology methods for flourishing growth of the Indian agriculture sector. Lastly, Ms Jayashree Reddy, brought about the crucial requirement of directing credit and investment to agriculture sector. She stressed on credit guarantee scheme, time bound financial inclusion plans, interest subvention in bank loans and investment in infrastructure. During the discussion the panelists agreed that the government should overcome the policy paralysis and make room for providing incentives to the private sector to encourage participation, thereby, making agriculture attractive for investments. Mr. G Chandrashekar, concluded the panel discussion by stating that – "If agriculture survives and flourishes, India will survive and flourish".
Click below for the India Infoline Weekly Newsletter:
Read Leader Speak:
All the news on India Infoline:
To subscribe please send a mail to firstname.lastname@example.org