The country's gross domestic product (GDP) registered a 7.8 per cent year-on-year growth in January-March, marking the fourth consecutive quarter of decline.
The 7.8 per cent GDP growth in the last quarter of 2010-11 is slower than the 8.3 per cent, 8.9 per cent, 9.3 per cent and 9.4 per cent rates recorded the preceding four quarters — that is, October-December, July-September, April-June, and January-March 2010.
The overall growth slowdown over successive quarters is reflected particularly in manufacturing activity. The year-on-year increase in output here has fallen to 5.5 per cent in the latest quarter from the heady 15.2 per cent of January-March 2010. In the previous three quarters, manufacturing had clocked 6 per cent, 10 per cent, and 12.7 per cent respectively.
The above growth moderation, some analysts believe, may prompt the Reserve Bank of India to press the pause button on aggressive monetary tightening. Instead of raising its repo rate by 50 basis points to 7.25 per cent — as it did on May 3 — the central bank might opt for a hike of only 25 basis points in its next review on June 16.
Meanwhile, the Central Statistics Office has marginally revised downwards its GDP growth estimate for 2010-11 to 8.5 per cent, from its earlier advance estimate (AE) figure of 8.6 per cent released on February 7.
While agricultural growth is placed higher in the revised estimates of national income released on Tuesday — largely courtesy a bumper Rabi crop — industry and services have not performed as well as what was indicated in the AE.
For the fiscal that ended in March, India's GDP at current market prices — the value of goods and services produced within its territory — was estimated at Rs 78,75,627 crore or $1.75 trillion. The per capita GDP at factor cost (net of taxes and subsidies) for 2010-11 worked out to Rs 61,610.
The Indian economy has, on the whole, had a reasonably good growth run in recent years, with annual GDP increase amounting to 8.5 per cent in 2003-04, 7.5 per cent in 2004-05, 9.5 per cent in 2005-06, 9.6 per cent in 2006-07, 9.3 per cent in 2007-08, 6.8 per cent in 2008-09, eight per cent in 2009-10 and 8.5 per cent in 2010-11.