India's Q2 GDP growth falls to 5.3%

The Indian economy grew by 5.3 per cent in the July-September period of the current financial year (2012-13), pulled down by poor performance of manufacturing and agriculture sectors, showing persistent signs of slowdown.

The gross domestic product (GDP) had expanded by 6.7 per cent in the same period of last fiscal.

It had grown by 5.5 per cent in the first quarter (April-June) of 2012-13.

During the three-month period ended September 30, the manufacturing sector grew marginally by 0.8 per cent, against 2.9 per cent growth in the same period of 2011-12, according to data released by the Central Statistical Organisation (CSO) on Friday.

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Farm sector output expanded by just 1.2 per cent in the July-September period this fiscal against 3.1 per cent in the same period last year.

Mining and quarrying sector, however, showed some improvement and recorded a growth of 1.9 per cent during the quarter, as against a contraction of 5.4 per cent in the second quarter of 2011-12.

The economic growth in the first six month of this fiscal (April-September) is 5.4 per cent, lower than 7.3 per cent growth clocked in the year-ago period.

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In the July-September quarter, trade, hotels, transport and communications segment also witnessed lower pace of growth at 5.5 per cent compared to 9.5 per cent expansion in the same quarter in year ago.

The growth rate of electricity, gas and water supply also dipped to 3.4 per cent in the second quarter, from 9.8 per cent witnessed in the same quarter of 2011-12.

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Construction sector expanded by 6.7 per cent Q2 of 2012-13, as against 6.3 per cent in the year-ago period.

Growth rate of services sector, including insurance and real estate, stood at 9.4 per cent in the second quarter, against 9.9 per cent recorded in same quarter last fiscal.

Finance Minister P Chidambaram had earlier said that the economy faces a "difficult situation" and the way to overcome this difficult situation is through innovation and increasing the production of goods and services.

Terming the second quarter economic growth rate of 5.3 per cent as "below expectations", Finance Minister P Chidambaram on Friday said it was mainly due to scanty rainfall and poor showing by the manufacturing sector.

"Overall, the growth rate is below our expectations," Chidambaram said in a statement after the official data showed that GDP growth fell to 5.3 per cent in July-September period.

The gross domestic product (GDP) had expanded by 6.7 per cent in the same period of last fiscal. In the April-June period of 2012-13, the economic growth rate was 5.5 per cent.

During the three-month period ended September 30 this year, farm sector output expanded by just 1.2 per cent, against 3.1 per cent in the same period last year.

"The reduction in growth in agriculture and allied sectors has been on account of rainfall being lower than normal, particularly in June-July. The impact on the khariff crop has pulled down the growth rate," Chidambaram said.

He said the industry growth has been lower mainly due to poor show by manufacturing, which grew marginally by 0.8 per cent, against 2.9 per cent in the same period of 2011-12.

Growth rate of services sector, including insurance and real estate, stood at 9.4 per cent in the second quarter, against 9.9 per cent recorded in same quarter last fiscal.

"The growth rate of services sector showed some improvement in Q2 of 2012-13 vis-a-vis the Q1, it still remains below the trend level," Chidambaram said.

The economic growth in the first six months (April- September) of this financial year (2012-13) is 5.4 per cent, lower than 7.3 per cent clocked in the year-ago period.