INDIA’S SLOWDOWN

INDIA'S GROWTH SLOWS

Kunal Kumar Kundu

Asia Times, June 3, 2011

BANGALORE - A drop in India's economic growth rate in the three months to March 31, to its lowest over the past five quarters, suggests efforts to contain demand through higher interest rates are beginning to have an impact.

Gross domestic product growth slowed to 7.8%, surprising the market, compared with 8.3% (revised up from 8.2%) in the previous three months, according to Central Statistical Office figures released on May 31. This was substantially lower than the 9.4% rate clocked during the same quarter of the financial year that ended in March 2010.

The full-year gross domestic product (GDP) growth for the financial year that ended in March was 8.5%, lower than the advance estimate of 8.6% released earlier this year but still higher than the FY 2009-10 growth rate of 8%.

The resurgent agriculture sector was the biggest growth driver. Although the fourth-quarter agriculture growth rate slowed to 7.5% from the third-quarter's 9.9%, the annual growth rate touched 6.6%, way above the 0.4% recorded during fiscal 2009-10.

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