TheIndian economy grew at a sluggish 5.5 percent in the first quarter ofthis fiscal in comparison to 8 percent in the correspondingquarter of the previous financial year owing to poor performance ofmanufacturing, mining and agriculture sector, official data showed Friday.
The April-June quarter data is slightly better than the 5.3percent growth registered in the country's gross domestic product (GDP) duringthe quarter ended March 31, 2012.
The figure is better than analysts' expectations of 5.2percent.
The sluggish growth in the first quarter was mainly onaccount of a mere 0.2 percent growth in themanufacturing sector, against 7.3 percent in the correspondingquarter of previous fiscal, even as farm sector growth dropped from 3.7percent to 2.9 percent, according to data released by the CentralStatistical Organisation (CSO).
Construction and services sector, which includesinsurance, finance and realty, grew at 10.9percent and 10.8 percent, respectively, during the quarterunder review. These two groups had expanded by 3.5percent and 9.4 percent, respectively, in the first quarter of 2011-12.
Seeing the data, top economic policymakers said thegrowth numbers were consistent with the government's estimates.
"These numbers are consistent withthe overall economic growth of 6.7 percent projected by us,"said C. Rangarajan, chairman of the prime minister's Economic Advisory Council.
Rangarajan said the economic growth is likely to remainsluggish even in the second quarter of the current financial year.
"You will see pick-up in the secondhalf of the year. In the third and fourth quarter, one should expect therebound," he said.
The Indian economy has been under stress in the recentquarters largely due to poor performance of the industrial and farm sector. Thecountry's GDP growth slumped to 6.5 percent in 2011-12,which is even lower than the 6.7 percent level achieved during theglobal financial crisis of 2008-09. Theeconomy had expanded by 8.4 percent in 2010-11.
Planning Commission Deputy Chairman Montek SinghAhluwalia also expressed a similar hope saying the growth would pick up in thesecond half of the fiscal.
"By the end of the second quarterand especially in the third quarter, we will have a rebound," Ahluwaliasaid.
He, however, said the revival in the economy would dependon 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 crorein the first quarter of 2012-13 ascompared to Rs.12,38,738 crore during the corresponding period oflast year, showing a growth rate of 5.5 percent, the CSO data showed.
"GDP for the first quarter hasmarginally improved to 5.5 percent. While the slightimprovement over fourth quarter of 2012 iscomforting, the individual components of GDP are of concern," said AnisChakravarty, senior director, Deloitte in India.
"Servicesector growth, which had earlier held at over 8 percent,has steeply declined to 6.9 percent --driven partly by low transport sector output. Further, industrial activity hasnot picked up -- high capital goods variance with low mining and manufacturing outputremains a cause of concern," Chakravarty said.