Q1 GDP: Are we in for a shocker?

The all important GDP numbers for the first quarter or the April-June quarter will be announced on Friday. A CNBC-TV18 poll forecasts that the number will be a mediocre 5.3%. Incidentally the economy grew by a solid 8% last year in the first quarter, but has since slowed in every subsequent quarter. CNBC-TV18's Gopika Gopakumar and Archana Shukla spoke to a bunch of top corporate honchos ahead of the GDP number and here's the key takeaways.

The slowdown in the Indian economy is now getting entrenched.
For yet another quarter economy is expected to grow at 5.3% which is lower than last year's corresponding figure of 8%.
Top Indian corporate leaders say they have reconciled to a low GDP growth of 5-6% for this year. But they worry whether this will be the new normal for India.
"We have to be concerned about growth abut we have to balance it with the fact that we have had a phenomenal growth in the past many years. So if we can use this period to consolidate and hence lower rowth I am ok. But if the lower growth is changing the trend line of Indian growth, that will be concerning," Uday Kotak, executive vice chairman & MD, Kotak Mahindra Bank.
What is also concerning is that the GDP will be at 5.3% even without any impact of the drought, since that will be felt only in from the third quarter.
For the April-June quarter agriculture is expected to come in at 2%, while industry is expected to grow at a dismal 0.2% and services at 7% compared to 9.3% year ago.
Also worrying is the latest data on household savings for FY12 net financial savings fell to the lowest in 22 years to 7.8% of the GDP.
Experts say lower savings will put pressure on domestic resources and could drag growth for a prolonged period since saving and investment trends don't change quickly. Corporates, however, are pinning hopes on the government to revive the investment cycle.
"Private sector today is shy of making any fresh investments either BOT or PPP or building new capacities. One reason behind that their balance sheets are already stretched. So we are depending on how much government will do in this kind of situation and currently I think it will take some time before things start to look up," AM Naik, CMD of L&T told CNBC-TV18.
S Mahalingam, CFO, TCS says "Times are worrying and unless the investments take place I really can't see how growth can take place. And there needs to be necessary conditions. It is no longer only bcoz of rate of interest/cost of capital."
A section of the market is hoping that a scary growth number under 5% may spur the RBI to cut rates. Most economists say this is unlikely since RBI is worried that the inflation problem is worse than the growth problem, others argue that even if rates are lowered, companies are so leveraged and so scared of policy flip flops that lower rates won't bring more growth.