India’s GDP growth for the first quarter (April-June) of the current financial year 2012-13 stood at 5.5% compared to 5.3% in the previous quarter (last quarter of the previous financial year 2011-12). Also it is much lower compared to 8% GDP growth in the same quarter last financial year.
As per the data published by the CSO, Electricity, Construction, “Financing, insurance, real estate and business services” and “Community, social and personal services” sectors growth stood at 6.3%, 10.9%, 10.8% and 7.9% respectively in the first quarter of current financial year compared to 8%, 3.5%, 9.4% and 3.2% growth in the same quarter last year. Agricultural growth stood better than expected at 2.9% in the same quarter compared to 3.7% last year. Manufacturing sector growth stalled at 0.2% in the first quarter compared to 7.3% growth in the same quarter last year. The below table shows the growth details of different sectors for the first quarter of current and previous financial year.
At the same time, Investment and consumptions dropped which is a matter of concern for the Indian government. With relatively better growth and Very high inflation, the Reserve Bank of India (RBI) may not cut key rates in its next monetary policy review on September 17. Now India’s economy desperately needs some economic reform and immediate rate cut in order to regain double digit GDP growth rate.