Terming the 6.9 per cent economic growth in the second quarter as “lower than expectation”, the Prime Minister’s Economic Advisory Council has said that good performance by farm sector would take annual growth for 2011-12 to 7.5 per cent.
“The growth in second quarter is lower than expectation. The poor performance of manufacturing sector and falling industrial production have led to lower growth,” the PMEAC Chairman, Dr C. Rangarajan, told PTI.
He, however, exuded confidence that growth would be better in the next two quarters.
“Performance of the economy in the third and fourth quarters should be better on account of improved performance of agriculture. We will still be able to reach the target of 7.5 per cent (growth) for the fiscal,” Dr Rangarajan said.
His comments follow the release of data showing 6.9 per cent Gross Domestic Product growth in the second quarter, the lowest in nine quarters, on account of slowdown in manufacturing and decline in mining.
GDP growth was 8.4 per cent in the second quarter of 2010-11. Economic growth in the first quarter of the current fiscal was 7.7 per cent.
Cumulative GDP growth in the first half (April-September) of 2011-12 also moderated to 7.3 per cent from 8.6 per cent in the corresponding period last fiscal.
The Reserve Bank has already lowered its growth projection for the current fiscal to 7.6 per cent from the earlier estimate of 8 per cent on account of the global slowdown and high domestic inflation. The Indian economy had grown by 8.5 per cent in 2010-11.