India's gross domestic product (GDP) is estimated to have slowed down to 6.9 per cent in 2011-12 because of falling investment in the industrial sector on tight monetary policy and recession in the western countries, Parliament was informed today.
The GDP grew by 8.4 per cent each in 2009-10 and 2010-11, the Minister of State for Finance Namo Narain Meena said in a written reply to the Rajya Sabha.
The Minister cited the data from the Advance Estimate released by Central Statistics Office (CSO) as on February, 7, 2012.
"The reduction in the growth rate in India in 2011-12 vis-a-vis last two years is attributable to both domestic and global factors.
Among domestic factors, the tightening of monetary policy, in order to control inflation resulted in slowing down of investment and growth, particularly in the industrial sector," Meena said.
Tightening of monetary policy, in particular, raising the repo-rate in order to control inflation, resulted in slowing down of investment and growth particularly in the industrial sector, the minister said.
The Economic Survey 2011-12, has forecast the growth rate of real GDP for 2012-13 to be 7.6 (-/+0.25) per cent.
Globally, the euro zone crisis and near recessionary conditions in Europe, sluggish growth in the US, stagnation in Japan and hardening international prices of crude oil hampered the GDP growth, he said.
In order to improve growth, government has proposed a faster, more inclusive and sustainable target of 9 per cent annual GDP growth in its Approach Paper to the 12th Five Year Plan (2012-17).
Agriculture growth of at least 4 per cent, creation of jobs in manufacturing and development of infrastructure facilities are identified as key requirements to achieve the growth target, he added.