NEW DELHI: Even though India performed better than most emerging economies despite the global economic slowdown and the Eurozone crisis, 2011 for it was largely marked by a phenomenon which no country desires -- slowing growth with high inflation.
Along with this, a spate of interest rate hikes, rising cost of raw material, successive weakening of the rupee and a perception of policy paralysis among stakeholders made 2011 a year that India would like to put behind.
The saving grace, though, was the export sector that more or less maintained the growth momentum, even as prices at the fag end of the year started easing, giving rise to hopes for a better prospect in 2012.
"Overall the outlook has been quite negative. There was some negativism at the beginning of the year and it started worsening in the past six-seven months," Anis Chakravarty, director with global consultancy Deloitte Haskins and Sells, told IANS.
Some industries were particularly affected by the downturn, notably aviation, mining, automobiles, construction and manufacturing, which led to retarded growth in India's gross domestic product (GDP).
In the first quarter of this fiscal, the growth declined to 7.7 percent, compared to 7.8 percent in the January-March quarter, and 8.3 percent in the previous three-month period. The growth slumped further to 6.9 percent in July-September.
In the first half of 2011-12, the GDP growth fell to 7.3 percent against the budgetary target of around nine percent for the current fiscal and 8.6 percent registered in the corresponding period of last year.
The slowdown prompted Finance Minister Pranab Mukherjee to lower the growth projection for the current fiscal to 7.5 percent. In the union budget, he had set the target of nine percent (plus or minus 0.25 percent). The economy grew 8.5 percent in 2010-11.
"I don't think we are going to achieve even 7.5 percent during the current fiscal year. Considering the recent slump in industrial production, we feel growth might even fall below seven percent," Chakravarty said, adding factory output is unlikely to improve soon.
In fact, after a slower growth in the April-September period, industrial output slipped into the negative territory, falling by 5.1 percent in October, according to the latest data. The performance of the capital goods sector was most disappointing, contracted 25 percent.
(Source- http://economictimes.indiatimes.com)
Along with this, a spate of interest rate hikes, rising cost of raw material, successive weakening of the rupee and a perception of policy paralysis among stakeholders made 2011 a year that India would like to put behind.
The saving grace, though, was the export sector that more or less maintained the growth momentum, even as prices at the fag end of the year started easing, giving rise to hopes for a better prospect in 2012.
"Overall the outlook has been quite negative. There was some negativism at the beginning of the year and it started worsening in the past six-seven months," Anis Chakravarty, director with global consultancy Deloitte Haskins and Sells, told IANS.
Some industries were particularly affected by the downturn, notably aviation, mining, automobiles, construction and manufacturing, which led to retarded growth in India's gross domestic product (GDP).
In the first quarter of this fiscal, the growth declined to 7.7 percent, compared to 7.8 percent in the January-March quarter, and 8.3 percent in the previous three-month period. The growth slumped further to 6.9 percent in July-September.
In the first half of 2011-12, the GDP growth fell to 7.3 percent against the budgetary target of around nine percent for the current fiscal and 8.6 percent registered in the corresponding period of last year.
The slowdown prompted Finance Minister Pranab Mukherjee to lower the growth projection for the current fiscal to 7.5 percent. In the union budget, he had set the target of nine percent (plus or minus 0.25 percent). The economy grew 8.5 percent in 2010-11.
"I don't think we are going to achieve even 7.5 percent during the current fiscal year. Considering the recent slump in industrial production, we feel growth might even fall below seven percent," Chakravarty said, adding factory output is unlikely to improve soon.
In fact, after a slower growth in the April-September period, industrial output slipped into the negative territory, falling by 5.1 percent in October, according to the latest data. The performance of the capital goods sector was most disappointing, contracted 25 percent.
(Source- http://economictimes.indiatimes.com)
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