Slow growth in farm and factory output hurts growth
GDP growth for the second quarter (July to September) could slip to 5 to 5.1 per cent
New Delhi: In a worrying sign for the Modi governmnet GDP growth for the second quarter (July to September) could slip to 5 to 5.1 per cent, according to governmnet sources. This could be due to expected slowdown in the agriculture and industrial growth. It outlines the daunting challenge for the NDA government to revive the depressed economy.India’s GDP growth had accelerated to 5.7 per cent in the first quarter (April to June). This was the fastest growth in the GDP in the last two-and-a-half years.
The country had grown at sub-five per cent in the last two financial years, worst performance in the last 25 years.Separately rating agency ICRA too in a research note on Tuesday predicted that the pace of growth of GDP at factor cost is expected to print at a lower 5 per cent in the second quarter. This, ICRA said will be on account of factors such as an unfavourable kharif harvest, sluggish manufacturing performance, slowdown in export growth and moderation in the pace of expansion of the Central government spending.
In terms of the sectoral components, the agency said that agriculture growth could slow down to around 0.5 per cent in the second quarter against 3.8 per cent in the first quarter and industry to around 2.6 per cent against 4.2 per cent in the first quarter. There could be a slight uptick in the services sector at 6.9 per cent in the second quatert from 6.8 per cent in the first quarter, said the rating agency. However, ICRA maintained its forecast of GDP growth of 5.3-5.5 per cent in 2014-15.
The agricultural gro-wth in 2014-15 is expected to remain below 1.5 per cent. “Despite the moderation in headline inflation, a broad-based revival in consumption demand is yet to set in,” said ICRA. With interest rates remaining largely sticky, rating agency expects the manufacturing sector to record a mild growth in FY15.
( Source : dc correspondent )
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