New Delhi, May 31 (IANS) Soon after revised estimates from the central statistics office showed India’s economic expansion at 8.5 percent last fiscal, the plan panel and experts said the gross domestic product (GDP) growth would be lower in 2011-12.
‘We have lowered the growth forecast for 2011-12. The RBI has said something. The finance ministry has said that it should be 8.5 percent. I think it should be somewhere between 8 to 8.5 percent,’ Planning Commission Deputy Chairman Montek Singh Ahluwalia told reporters here.
Ahluwalia said it was worrying that growth had declined in the last quarter of 2010-11, compared to the previous sequential quarter.
The Reserve Bank of India (RBI), in its annual monetary policy for the current fiscal, had said that the economy would grow only by around 8 percent.
The GDP grew by 7.8 percent in the quarter ending March 31 — the slowest in the last five quarters.
‘The downward revision is mainly on account of lower performance in mining, quarrying, manufacturing and trade, hotels, transport, and communication and financing, insurance, real estate and business services than anticipated,’ a Central Statistical Organisation statement said.
The growth rates of various sectors for 2010-11 are as follows:
* Mining and quarrying (5.8 percent)
* Manufacturing (8.3 percent)
* Agriculture, forestry and fishing (6.6 percent)
* Electricity, gas and water supply (5.7 percent)
* Construction (8.1 percent)
* Trade, hotels, transport and communication (10.3 percent)
* Financing, insurance, real estate and business services (9.9 percent)
* Community, social and personal services (7 percent)
Prominent industry lobbies blamed the persistent rate hikes by the Reserve Bank of India and rising input costs for a slowdown in industrial output, which had contributed to a decline in GDP in the fourth quarter of 2010-11.
They said that as long as such a situation continued, the economic expansion this year would be in the range of 8-8.5 percent.
‘The slowdown has been largely on account of the mining and manufacturing sectors, which have been affected by the rising cost of raw materials and slowdown in project clearances. The steep rise in interest rates will continue to have a softening impact on growth in the current year,’ said Chandrajit Banerjee, director general of CII.
‘CII expects GDP growth in the range of 8.0-8.5 percent in 2011-12,’ Banerjee added.
Agreed Rajiv Kumar, secretary general of FICCI: ‘The persistent tightening of monetary policy is surely leaving an imprint on the performance of industry.’
The RBI has hiked key interest rates nine times sinch March 2010. It is scheduled to review the monetary policy on June 16.
