FY12 advance GDP at 6.9% way below estimates

The economic growth is likely to fall to a three-year low of 6.9% in 2011-12, mainly due to sharp slowdown in manufacturing, agriculture and mining sectors, against 8.4% expansion in the last fiscal. The FY12 GDP outlook is way below estimates. The CSO's GDP growth projection is a tad lower than the 7% forecast made by the Reserve Bank of India in its
quarterly monetary policy review last month.

According to a CNBC-TV18 poll the GDP growth was seen at 7.1% in the current year against 8.4% year ago.

Here is a snapshot:

• FY12 Farm growth at 2.5% vs 7% (YoY)
• FY12 Manufactruring growth at 3.9%  vs 7.6% (YoY)
• FY12 Construction growth at 4.8% vs 8% (YoY)
• FY12 Mining growth at -2.2% vs 5% (YoY)

Agriculture and allied activities are likely to grow at 2.5% in 2011-12, compared to a robust growth of 7% in 2010-11, according to the Advanced Estimates released by CSO.

Manufacturing growth is also expected to drop down to 3.9% in this fiscal from 7.6% last year.

In its mid-year Economic Review, the government had also pegged growth at around 7.5%. The current estimate is a sharply lower than the 9 per cent growth projection for 2011-12 made by the government in its pre-Budget survey in February last year.

The latest GDP growth estimate of 6.9% for the entire fiscal means that the pace of economic expansion slowed in the second half of 2011-12, given that GDP growth in the April-September, 2011, period stood at 7.3%.

According to the advance estimates, mining and quarrying is likely to witness a decline of 2.2%, compared to a growth of 5% a year ago.

Growth in construction is also likely to slip to 4.8% in 2011-12, against an 8% in 2010-11. Furthermore, the finance, insurance, real estate and business services sectors are likely to grow by 9.1%
 his fiscal, against 10.4% last fiscal.

(With inputs from PTI)