The last nail in the coffin was hit by weak September quarter GDP numbers, which logged a tepid 6.9% growth, as against an optimistic 8.8% during the second quarter of FY 2010-11. Thus, it would be of no surprise if analysts start singing the songs of severe downturn in the domestic economy with growth figures dipping below the 7 percent.

[Note: India’s September IIP data logged subdued 1.9% growth]

According to the latest release by Central Statistics Office, quarterly GDP at factor cost for Q2 of FY12 is estimated at Rs.1227254 crore as against Rs.1148472 crore in the second quarter last fiscal year.

industry1 thumb India’s September IIP data logs 1.9% growth !

The statement further said that while ‘electricity, gas and water supply’ clocked a steady growth rate of 9.8%, ‘trade, hotels, transport and communication’ registered a healthy 9.9% growth. However, the show stealer was ‘financing, insurance, real estate and business services’ that turned up with a stellar 10.5% growth in the September quarter.

However, the downward pressure on India’s GDP was exerted by slower estimated growth rates in other economic activities like ‘agriculture, forestry & fishing’ (3.2%), steep fall in manufacturing sector growth (2.7%), tepid construction activity (4.3%) and negative growth in ‘mining and quarrying’ sector at 2.9% during the period.

Analysts have attributed this steep setback to the economy to high interest rates prevailing in the system, putting pressure on the renewed activity and new projects to foster growth momentum in various states of the nation.

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