CSO Data revealed Growth in the April-June Quarter of 2011-12 Quarter stood at 7.7%

Data released by the Central Statistics Office on 30 August 2011 showed growth in the April-June quarter of the current financial year 2011-12 stood at 7.7% compared to 8.8% in the same period in 2010-11 fiscal. In the January-March quarter 2010-11, the economy expanded 7.8%.

The GDP data based on the revamped Index of Industrial Production (IIP) resulted in revisions in mining, manufacturing, electricity and trade, hotels and restaurant sectors. Accordingly, the government revised downwards the first quarter growth for 2010-11 from 9.3 per cent to 8.8 per cent.

The manufacturing sector grew 7.2% in the April-June quarter below the 10.6% registered in the first quarter of 2010-11. The farm sector grew a robust 3.9% in the June quarter, up from 2.4% in the same year-ago quarter. The services sector that accounts for more than 52% of GDP grew 10% in the June quarter. The construction sector grew only 1.2% in the June quarter, down from 7.7% in the 2010-11 first quarter.

Mining, manufacturing and construction activities slowed down in the April-June quarter of 2011-12 partly due to the revamped IIP but also because the 11 rate hikes by the Reserve Bank of India since March 2010 have undermined business sentiments.

Agriculture expanded by 3.9% during the first quarter vis-à-vis 2.4% in the April-June quarter of 2010-11. However, industry expanded by only 5.1% (vis-à-vis 10.5%) whereas service sector grew at 10% (vis-à-vis 9.6%).
Investment and consumption slowed as RBI raised interest rates 11 times in the past 18 months to calm price pressures. However inflation still remains elevated at around 9%.

In order to clock a growth rate of 8.2 % growth for the current fiscal, as projected by the Prime Minister's Economic Advisory Council (PMEAC), GDP has to grow at 8.3% in the remaining course of the current fiscal. (agriculture at 2.7%, industry at 7.7% and service sector at 10% respectively). The statistics office also lowered the base for the year-ago quarter to 8.8% from the previously announced 9.3% and economists said this had helped project a healthier number.

During the period under review, services sector, including insurance and real estate, grew by 9.1 per cent against 9.8 per cent in the corresponding period in 2010-11. The trade, hotels, transport and communications segments grew by 12.8 per cent, up from 12.1 per cent in the 2010-11 fiscal.