The revised FY'2011-12 gross domestic product (GDP) growth is likely to fall to 6 per cent on account of a slump in manufacturing led by weak demand and difficulty in accessing funds, according to a report.
First revised estimate of GDP for FY'12 was 6.2 per cent, based on a 2.7 per cent growth in the industrial sector. The second revised estimate for FY1'2 is scheduled to be released on January 31.
"We expect overall industrial sector growth may have logged in a lower growth rate in the final analysis. This may finally drag the overall GDP growth to 6 per cent, sub-6 per cent may not be ruled out, from the earlier provisional figure of 6.2 per cent, unless there is a significant upward revision in other components which looks unlikely," SBI said in its internal report Ecowrap.
The report said the uncertain global and domestic environment dragged investment down by 8.7 per cent in FY'12.
Tight monetary policy resulted in escalating lending rates discouraging industrial activity and interest paid by firms rose 37.1 per cent in FY'12, significantly higher than 20.1 per cent rise in interest payment in FY11 and a mere 6.8 per cent rise in FY'10.