New Delhi: The Indian economy grew at a sluggish 5.5 per cent in the first quarter of this fiscal in comparison to 8 per cent in the corresponding quarter of the previous financial year owing to poor performance of manufacturing, mining and agriculture sector, official data showed on Friday.
The April-June quarter data is slightly better than the 5.3 per cent growth registered in the country's gross domestic product (GDP) during the quarter ended March 31, 2012.
The figure is better than analysts' expectations of 5.2 per cent.
The sluggish growth in the first quarter was mainly on account of a mere 0.2 per cent growth in the manufacturing sector, against 7.3 per cent in the corresponding quarter of previous fiscal, even as farm sector growth dropped from 3.7 per cent to 2.9 per cent, according to data released by the Central Statistical Organisation (CSO).
Construction and services sector, which includes insurance, finance and realty, grew at 10.9 per cent and 10.8 per cent, respectively, during the quarter under review. These two groups had expanded by 3.5 per cent and 9.4 per cent, respectively, in the first quarter of 2011-12.
Seeing the data, top economic policymakers said the growth numbers were consistent with the government's estimates.
"These numbers are consistent with the overall economic growth of 6.7 per cent projected by us," said C. Rangarajan, chairman of the prime minister's Economic Advisory Council.
Rangarajan said the economic growth is likely to remain sluggish even in the second quarter of the current financial year.
"You will see pick-up in the second half of the year. In the third and fourth quarter, one should expect the rebound," he said.
The Indian economy has been under stress in the recent quarters largely due to poor performance of the industrial and farm sector. The country's GDP growth slumped to 6.5 per cent in 2011-12, which is even lower than the 6.7 per cent level achieved during the global financial crisis of 2008-09. The economy had expanded by 8.4 per cent in 2010-11.
Planning Commission Deputy Chairman Montek Singh Ahluwalia also expressed a similar hope saying the growth would pick up in the second half of the fiscal.
"By the end of the second quarter and especially in the third quarter, we will have a rebound," Ahluwalia said.
He, however, said the revival in the economy would depend on investments, both from public as well as private sectors.
India's GDP at factor cost at constant (2004-2005) prices is estimated at Rs.13,06,276 crore in the first quarter of 2012-13 as compared to Rs.12,38,738 crore during the corresponding period of last year, showing a growth rate of 5.5 per cent, the CSO data showed.
"GDP for the first quarter has marginally improved to 5.5 per cent. While the slight improvement over fourth quarter of 2012 is comforting, the individual components of GDP are of concern," said Anis Chakravarty, senior director, Deloitte in India.
"Service sector growth, which had earlier held at over 8 per cent, has steeply declined to 6.9 per cent -- driven partly by low transport sector output. Further, industrial activity has not picked up -- high capital goods variance with low mining and manufacturing output remains a cause of concern," Chakravarty said.
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