GROWTH SLIPS TO 5%

Economic growth rate slipped to a decade low of 5 per cent in 2012-13 on account of poor performance of farm, manufacturing and mining sectors, raising hopes for rate cut by Reserve Bank to boost economy. The growth rate in the fourth quarter ending on March 31, stood at 4.8 per cent showing a marginal improvement over 4.7 per cent recorded in the third quarter of 2012-13. "Growth numbers are as per expectations," Finance Minister P Chidambaram said after the CSO released data on national income accounts here today. Commenting on the the data, Planning Commission Deputy Chairman Montek Singh Ahluwalia said, "There is evidence the economy has bottomed out. But we still don't have evidence of a strong recovery. It is challenging to get to 6 per cent (growth) where last quarter is 4.8 per cent." According to the finance ministry, the growth in the current fiscal is likely to improve to 6.1-6.7 per cent. Economic growth or gross domestic product (GDP) had expanded by 5.1 per cent in January-March quarter of last fiscal. Economy had grown at 4 per cent in 2002-03. India's economic growth was at 6.2 per cent for the 2011-12 fiscal. It had grown by 5.4 per cent, 5.2 per cent and 4.7 per cent in the first, second and third quarters, respectively, of 2012-13, the data showed. Prime Minister's Economic Advisory Council Chairman C Rangarajan said, "GDP numbers has been on expected lines.... as far as manufacturing is concerned perhaps we have reached the bottom. "WPI based inflation has slowed, I think there is a greater room for the RBI to act," he added. The RBI is scheduled to announce its mid-quarter policy review on June 17. In its last review, it had cut the key interest rates by 0.25 per cent.
"CII has been advocating further easing of the monetary policy with a reduction in repo rate and Cash Reserve Ratio (CRR)," CII Director General Chandrajit Banerjee said.
The BSE sensex slipped by 485 points to 19,730.55 during the intra-day trade.

According to the CSO data, the manufacturing sector In January-March quarter of 2012-13 grew marginally by 2.6 per cent, against 0.1 per cent growth in the same period of the earlier fiscal.
During 2012-13, the sector under review grew by a meagre one per cent compared to 2.7 per cent in the previous fiscal. Mining and quarrying sector contracted by 3.1 per cent during the fourth quarter of last fiscal, as against growth of 5.2 per cent in the same period of 2011-12. The contraction in mining sector remained unchanged at 0.6 per cent in 2012-13 over the earlier fiscal. Farm sector output rose by a mere 1.4 per cent in the last quarter of FY13 as against 2 per cent in the same quarter of 2011-12. The agriculture sector grew by just 1.9 per cent in 2012-13 compared to 3.6 per cent in 2011-12. The growth rate of electricity, gas and water supply slowed to 2.8 per cent in the fourth quarter from 3.5 per cent witnessed in the same quarter of 2011-12. The segment grew by 4.2 per cent in 2012-13 compared to 6.5 per cent in previous fiscal. Construction sector expanded by 4.4 per cent in Q4 of 2012-13, as against 5.1 per cent in the year-ago period. The segment grew by 4.3 per cent in 2012-13 as against 5.6 per cent in the previous fiscal. Trade, hotels, transport and communications segment grew at 6.2 per cent in the January-March quarter this year as against 5.1 per cent in the same period a year ago. The sector grew at 6.4 per cent in 2012-13 compared to 7 per cent in the earlier fiscal. Growth rate of services sector, including insurance and real estate, stood at 9.1 per cent in 4th quarter against 11.3 per cent in same period of 2011-12. The segment grew by 8.6 per cent in 2012-13 compared to 11.7 per cent in 2011-12. Community social and personal services registered a growth of 4 per cent in Q4 period compared to 6.8 per cent in the January-March quarter of 2011-12. The segment grew by 6.6 per cent in 2012-13 as against 6 per cent in the previous fiscal.