India's economic growth (GDP) declines to 5.3% in July-Sept quarter, from 6.7% year ago

Nov 30 2012, 16:24 IST
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India's GDP growth likely stuck near three-year low. (Reuters) India's GDP growth likely stuck near three-year low. (Reuters)
SummaryEconomy grew at a lower-than-expected 5.3 percent in the quarter ending in September.

from 0.7 per cent growth in first quarter, Ficci said, adding that "it may still be early to say that the slowdown in investment activity has bottomed out".

The RBI is scheduled to come out with its mid-quarter policy review on December 18 and analysts expects that it will reduce the cash reserve ratio (CRR).

"The RBI is likely to reduce the CRR by 25 bps in the December mid-quarter policy review to ensure credit flow to productive sectors," ICRA Senior Economist Aditi Nayar said.

During the July-September quarter, mining and quarrying sector showed some improvement and recorded a growth of 1.9 per cent during the quarter, as against a contraction of 5.4 per cent in the second quarter of 2011-12.

In the second quarter, trade, hotels, transport and communications segment also witnessed lower pace of growth at 5.5 per cent compared to 9.5 per cent expansion in the same quarter in year ago.

The growth rate of electricity, gas and water supply also dipped to 3.4 per cent in the second quarter, from 9.8 per cent witnessed in the same quarter of 2011-12.

Construction sector expanded by 6.7 per cent, as against 6.3 per cent in the year-ago period.

Growth rate of services sector, including insurance and real estate, stood at 9.4 per cent in the second quarter, against 9.9 per cent recorded in same quarter last fiscal.

"Do not expect any major change in the December quarter figures," research firm KASSA's Director Siddharth Shankar said.

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