The revised FY'2011-12 gross domestic product (GDP) growth is likely to fall to 6 % 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 %, based on a 2.7 % 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 %, sub-6 % may not be ruled out, from the earlier provisional figure of 6.2 %, 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 % in FY'12.
Tight monetary policy resulted in escalating lending rates discouraging industrial activity and interest paid by firms rose 37.1 % in FY'12, significantly higher than 20.1 % rise in interest payment in FY11 and a mere 6.8 % rise in FY'10.