GDP grows at 4.4% in June quarter, slowest in 4 years

India's economy grew at 4.4 per cent in the April-June 2013 quarter, the slowest quarterly rate since the global financial crisis. The lower than expected growth was on account of a contraction in mining and manufacturing sectors, government data showed on Friday.

Manufacturing fell an annual 1.2 per cent during the quarter while mining fell by 2.8 per cent, the data showed. Farm output rose 2.7 per cent.

This was also the third consecutive quarter of below 5 per cent growth, building more pressure on the government to take immediate action to resuscitate it. The Indian economy grew at 5.4 per cent in the same quarter last year.

HDFC's vice chairman and CEO Keki Mistry told NDTV that manufacturing has pulled everything down. "Investment cycle is slowing down and that has to reflect in manufacturing numbers," he added.

Jai Shankar, an economist, said the GDP data is broadly in line with street expectations and markets had factored in the weak numbers. So, stock markets are unlikely to react negatively to the data on Monday.

A Reuters poll of 36 economists estimated first quarter GDP to grow at 4.7 per cent year-on-year in the quarter to June.

Mr Shankar, however, said the economy represents a sorry state of affairs. Economic growth has virtually halved in two years. The economy expanded at 5 per cent in the fiscal year that ended in March 2013 -- the lowest level in a decade -- and many economists expect 2013-14 to be worse.

The weak data comes on a day that the Prime Minister sought to reassure Parliament that his government was in control and taking steps to reverse a steep decline in the rupee and keep the fundamentals of the economy strong. The Prime Minister had said in his statement that he expects a pick-up in economic growth from the second half of this fiscal.

Paranjoy Guha, another economist said, "The PM is entitled to his optimism, but honestly that is not going to happen. India is into a vicious cycle where one problem is feeding into another, he added.

Policy flip-flops, high-profile tax disputes and numerous regulatory hurdles have stymied investments to a point where many firms find it easier to invest overseas than at home.

The Prime Minister and Finance Minister over the past year cut budget busting fuel subsidies, sped up the clearances for infrastructure projects and relaxed rules for foreign investments into a swathe of industries. But most analysts view their actions so far as too little, too late.

(With inputs from Reuters)

India's economy grew at 4.4 per cent in the April-June 2013 quarter, the slowest quarterly rate since the global financial crisis. The lower than expected growth was on account of a contraction in mining and manufacturing sectors, government data showed on Friday.

Manufacturing fell an annual 1.2 per cent during the quarter while mining fell by 2.8 per cent, the data showed. Farm output rose 2.7 per cent.

This was also the third consecutive quarter of below 5 per cent growth, building more pressure on the government to take immediate action to resuscitate it. The Indian economy grew at 5.4 per cent in the same quarter last year.

HDFC's vice chairman and CEO Keki Mistry told NDTV that manufacturing has pulled everything down. "Investment cycle is slowing down and that has to reflect in manufacturing numbers," he added.

Jai Shankar, an economist, said the GDP data is broadly in line with street expectations and markets had factored in the weak numbers. So, stock markets are unlikely to react negatively to the data on Monday.

A Reuters poll of 36 economists estimated first quarter GDP to grow at 4.7 per cent year-on-year in the quarter to June.

Mr Shankar, however, said the economy represents a sorry state of affairs. Economic growth has virtually halved in two years. The economy expanded at 5 per cent in the fiscal year that ended in March 2013 -- the lowest level in a decade -- and many economists expect 2013-14 to be worse.

The weak data comes on a day that the Prime Minister sought to reassure Parliament that his government was in control and taking steps to reverse a steep decline in the rupee and keep the fundamentals of the economy strong. The Prime Minister had said in his statement that he expects a pick-up in economic growth from the second half of this fiscal.

Paranjoy Guha, another economist said, "The PM is entitled to his optimism, but honestly that is not going to happen. India is into a vicious cycle where one problem is feeding into another, he added.

Policy flip-flops, high-profile tax disputes and numerous regulatory hurdles have stymied investments to a point where many firms find it easier to invest overseas than at home.

The Prime Minister and Finance Minister over the past year cut budget busting fuel subsidies, sped up the clearances for infrastructure projects and relaxed rules for foreign investments into a swathe of industries. But most analysts view their actions so far as too little, too late.

(With inputs from Reuters)