India's fourth quarter GDP grows at 5.3%, 6.5% for FY 12

[ALOK31]

NEW DELHI: India's Gross Domestic Product (GDP) grew at a mere 5.3 per cent in the fourth quarter of the financial year as against 7.8 per cent in the same quarter last year.

Growth hit a nine year low as the manufacturing sector contracted and a fall in the rupee to a record low suggests the economy remains under pressure in the current quarter.

GDP for the September to December 2011 quarter grew at 6.1 per cent. The GDP growth rate was drastically below the consensus estimates of 6.1 per cent.

The GDP growth rate for FY12 dropped to 6.5 per cent versus a robust 8.4 percent in FY11.

While the growth in the manufacturing sector fell to 0.3 per cent in Q4 as against 0.4 per cent in Q3, the growth in the construction sector also dipped at 4.8 per cent versus 7.2 per cent in Q3. The financial services sector of the economy belied trend and grew at 10 per cent versus 9 per cent in the third quarter.

According to the figures released by the government, the FY12 revenue gap stood at Rs 3.847 lakh crore versus Rs 3.949 lakh crore in the previous year. The FY12 fiscal deficit was at 5.8 per cent of the GDP as against the budget aim of 5.9 per cent.

Commenting on the disappointing numbers, Taimur Baig of Deutsche Bank told ET Now that with inflation high, he did not expect much action in the monetary policy review in June. He emphasised the need to revive expectations.

Sajid Chinoy of JP Morgan expressed concern over both the pressures from Europe which might have a spillover affect and the supply side constraints that have developed in some sectors in the economy. "Investor confidence will return if twin deficits are dealt with," he told ET Now.

C Rangrajan, Chairman of PMEAC said, "Obviously it is a disappointing one. Decline in industrial production has not been offset by growth in agri production. Going ahead we can still expect 6.5-7% as agri is likely to do well with expectation of a good monsoon, manufacturing will rise from a low base and service sector will record decent growth."

He said that the government has in principle decided to correct diesel prices but the actual decision is influenced by political considerations. However he added that in the course of the year steps will be taken to control subsidies to keep the fiscal deficit in check.

Pronab Sen, principal advisor, Planning Commission told ET Now that not enough action had been done on the fiscal policy front and that there was a need to change that.

A slew of banks and economists cut their growth forecasts of the Indian economy for the financial year 2012-13.

They are worried that a lethal cocktail of poor macro indicators and an environment of policy drift has cast a darker shadow on the economy than previously thought.
http://http://timesofindia.indiatimes.com/business/india-business/Indias-fourth-quarter-GDP-grows-at-5-3-6-5-for-FY-12/articleshow/13683804.cms

 

[Chinese-Dragon]

The Rupee fell to a record low today as well.

Indian GDP growth falls to 5.3% - Financial Times

India’s economic growth fell to a nine-year low in the first three months of 2012, a clear sign that the country’s slowdown is deepening and affecting all sectors of the economy.

Sharp falls in the manufacturing and agriculture sectors led Asia’s third-largest economy to grow only 5.3 per cent year on year in the quarter, compared with 9.2 per cent growth a year earlier.

“It’s a disaster,” said Rajiv Kumar, the secretary-general of the Federation of Indian Chambers of Commerce and Industry. “We are facing a crisis of slow growth and high inflation that is extremely concerning.”

India’s economic difficulties are widely regarded as self-inflicted. Although Delhi often blames the eurozone sovereign debt crisis for India’s woes, domestic economists argue that greater faults lie with those running the world’s largest democracy.

Parliament has been in a state of virtual paralysis since the Congress-led coalition government became embroiled in a wave of corruption scandals involving senior members of the cabinet. Key reforms – including allowing foreign investment in India’s retail sector as well as passing a law to facilitate the acquisition of land to develop vital infrastructure projects – have been stalled in parliament for more than a year.

The rupee hit a fresh record low of Rs56.5 against the dollar on Thursday. Over the past eight months it has depreciated about 25 per cent against the dollar – making it one of the worst performing emerging market currencies, according to BNP Paribas.

 

[sancho]

The Rupee fell to a record low today as well.

Not only the Rupee:

China Yuan Sees Record Monthly Drop As Global Fear Rises

BEIJING (MNI) - The Chinese yuan saw its biggest monthly decline in May since the 2005 revaluation on the back of a global flight-to-safety triggered by global concern about the future of the eurozone.

The yuan ended at 6.3690 to the dollar Thursday, bringing its losses for May to 0.92%. That marks a steeper drop than the 0.48% tumble in August 2010.

The Chinese currency has now fallen for three months in a row, having lost 0.19% in April and 0.07% in March. It rose 0.24% in February, making up for January's 0.23% loss...

https://mninews.deutsche-boerse.com...an-sees-record-monthly-drop-global-fear-rises


People have to understand that neither China nor India can grow at the same pace they had in the past, in times of bank, economic and financial crisis in the west. Both of our countries are highly dependent on these countries, so when they tumble we will have problems too. Indias democratic system in this case will face even more trouble, since it is more difficult to react, but at the end of the day, it is still China and India that keeps pushing the world with their growth, otherwise the world recession would have been way worse now!

 

[JayAtl]

Not only the Rupee:



https://mninews.deutsche-boerse.com...an-sees-record-monthly-drop-global-fear-rises


People have to understand that neither China nor India can grow at the same pace they had in the past, in times of bankin, economic and financial crisis in the west. Both of our countries are highly dependent on these countries, so when they tumble we will have problem too. Indias democratic system in this case will face even more trouble, since it is more difficult to react, but at the end of the day, it is still China and India that keeps pushing the world with their growth, otherwise the world recession would have been way worse now!

He won't get it . The locust is only there to destroy and cannibalize anything good, in this case facts vs. propaganda and his racist views.

 

[sancho]

He won't get it . The locust is only there to destroy and cannibalize anything good, in this case facts vs. propaganda and his racist views.

But it's not only Chinese that talks about falling Rupee or Indian growth, look at our media and public too! Everybody is blaming the government currently for 5 to 6 % growth, ignoring the international problems related to the slow down and overexpecting that we can continue to grow at 9% for decades. That's why I said, we have to see the greater picture today to understand why it's not only India that is "suffering", although we are still in a very good position compared to other democracies.

 

[Chinese-Dragon]

He won't get it . The locust is only there to destroy and cannibalize anything good, in this case facts vs. propaganda and his racist views.

LOL, so you think the "Financial Times" is Chinese propaganda? What about the "Wall Street Journal"?

Even India's own media is saying the same thing.

Interestingly, the Rupee reached its lowest point recently, which would not affect last quarter's data.

So the next quarter looks to be even worse, considering that the situation has deteriorated significantly since then.

 

[JayAtl]

But it's not only Chinese that talks about falling Rupee or Indian growth, look at our media and public too! Everybody is blaming the government currently for 5 to 6 % growth, ignoring the international problems related to the slow down and overexpecting that we can continue to grow at 9% for decades. That's why I said, we have to see the greater picture today to understand why it's not only India that is "suffering", although we are still in a very good position compared to other democracies.

Hyper panic is a hallmark of all media , happens even here in the US . There is some truth to the fact that Indian politics , again like the US , is hampering pro growth agenda . India needs the retail FDI deal , it needs to allow more percentage of ownership for foreign investors, it needs to streamline and make business license process as easy as hong kong does... This political gamesmanship needs to stop and they need to put the country first.

LOL, so you think the "Financial Times" is Chinese propaganda? What about the "Wall Street Journal"?

Even India's own media is saying the same thing.

 

[rashtriya.rifles]

Hyper panic is a hallmark of all media , happens even here in the US . There is some truth to the fact that Indian politics , again like the US , is hampering pro growth agenda . India needs the retail FDI deal , it needs to allow more percentage of ownership for foreign investors, it needs to streamline and make business license process as easy as hong kong does... This political gamesmanship needs to stop and they need to put the country first.

The irony is when u sit with any leader of a major poilitical party and try to reason with him/her about pros of FDI in retail, pat comes the reply , YES. Still it's not passed in parliament. Fcuking two faced snakes both BJP and Congress are

 

[CorporateAffairs]

The Rupee fell to a record low today as well.

as frustrated

 

[arp2041]

so what is the nominal GDP in billion dollars, of India for the FY12??

 

[Chinese-Dragon]

so what is the nominal GDP in billion dollars, of India for the FY12??

List of countries by GDP (nominal) - Wikipedia, the free encyclopedia

First column is IMF data for 2011.

Second column is World Bank data for 2010 (outdated).

 

[arp2041]

This article sums up the situation :

“India Shining”? Or the Greece of Asia?

“What ails India?” So asked the FT‘s Mumbai bureau chief of a Western investor recently. The answer? Everything. “On every indicator we look at, there is a red flag,” the investor said. “This country is close to becoming the Greece of Asia.”

There are a number of reasons why India, once Asia’s most promising economy, is slipping. One is the decline of the License Raj, the long accepted patronage network of businessmen and politicians, the system of permissions, licences, and investment that kept India’s economic machine churning at a high rate. Recently, the Raj has come under attack—from a zesty media and active public who want more transparency, from foreign investors who want an easier way to get a piece of the pie, from an empowered Supreme Court and government auditors.

As India’s economy continues to modernize, there will be inevitably be times of slow growth, inflation, corruption scandals, and skittish investors. Prime Minister Manmohan Singh, who championed the wildly successful economic reforms of the 1990s, has not had that kind of success in the next round of reforms. His government may be cracking down on corruption, but partly as a consequence of the complicated politics of Indian coalition-building, vital decisions have been deferred and even the low hanging fruit has been left hanging on the tree.

Singh’s government will pay a steep price if the economic climate does not change by the time elections roll around in 2014. His Congress Party was battered in provincial elections a few months ago. One frontrunner to replace him, Narendra Modi, is a divisive figure and, due to widely credited reports of his personal responsibility for massacres of Muslims, he is not beloved by the international community. His party, the BJP, is usually identified with Hindu nationalism, and elements of that party have been labeled fascist.

But Modi is a champion of business in his home state of Gujarat. Gujarat has consistently been one of the great success stories in the Indian economy, and Via Meadia can envision Modi pushing that line with some success during national elections. If Singh’s government can’t prove its current policies will brighten things up once again and continue India’s great success story (“India shining&#8221, then we may well see Narendra Modi waltzing triumphantly into Delhi in the near future. If so, the world will have to hope that Modi the prime minister will live up to the best elements of his mixed record.

The rise of great powers is complicated; look at the way that Andrew Jackson, one of the great American advocates of popular democracy, was also a slaveholder. India’s story is going to be at least as complicated and as difficult — for itself, and for countries whose strategic interests are closely bound up in its fate.

“India Shining”? Or the Greece of Asia? | Via Meadia

 

[JayAtl]

^^^ that's a fluff piece . Modi 's party is blocking reforms like retail in FDI so as to not give congress a win. They want it to happen on their watch..

 

[arp2041]

^^^ that's a fluff piece . Modi 's party is blocking reforms like retail in FDI so as to not give congress a win. They want it to happen on their watch..

biggest opposer of reforms of govt. is not opposition but within UPA itself like the TMC & DMK, what can BJP do in that? Also this govt. is called the most corrupt govt. in independent India, is BJP responsible for that? look our gdp nos. we had a free fall in FY12, who is responsible for that?

 

[Zeeshan360]

^^^ that's a fluff piece . Modi 's party is blocking reforms like retail in FDI so as to not give congress a win. They want it to happen on their watch..

Who cares ..
Always the ruling party is held culprit

Actually the only thing that Congress did it right in UPA-2 was the Retail FDI bill .. But sigh it wasn't passed

And our 3rd grade Hindi media was only showing negative crap about the bill instead of showing the benefits of the bill