India's economy grows at slowest pace in five quarters

Confirming fears of a slowdown, India's economy grew by just 7.8% in the fourth quarter ending March this year, mainly due to poor performance of the manufacturing sector, as against 9.4% in the same three-month period of the previous fiscal.

However, economic growth, as measured by the Gross Domestic Product, improved to 8.5% in 2010-11 from 8 per cent in 2009-10 due to better farm output and construction activities and financial services performance.

Meanwhile, the GDP growth figures for the first and third quarters of FY'11 have been revised upward. While the GDP growth figure for Quarter 1 has been pegged at 9.3% --as against the earlier estimate of 8.9% -- the Q3 GDP growth has been revised upward to 8.3% from 8.2%.

During the quarter ending March 31 this year, growth in the manufacturing sector slowed down to 5.5% from 15.2% in the same quarter of 2009-10.

In addition, the mining and quarrying sector grew by only 1.7% during the quarter under review, as against 8.9% in the fourth quarter of the previous fiscal.

Furthermore, the trade, hotels, transport and communications segment grew by 9.3% in the March quarter this year, as against 13.7% expansion in the same the period of 2010.

However, services including banking and insurance grew by 9% in the March quarter this year, compared to 6.3% in the corresponding period last year.

Farm output showed tremendous improvement, growing at 7.5% during the quarter under review, compared to a meagre 1.1% in the same three-month period last year.

Though economic expansion slowed down in the fourth quarter, overall GDP growth touched the 8.5% mark in 2010-11, as against 8% in 2009-10, due the smart recovery in farm output.

The agriculture and allied sectors grew by 6.6% during the fiscal, as against a meagre 0.4% in the previous year.

The growth of services, including banking and insurance, improved to 9.9% in 2010-11 from 9.2% in the previous fiscal.

The trade, hotels, transport and communication segment grew by 10.3% in FY'11, as against 9.7% last fiscal, while growth of the construction sector stood at 8.1%, as against 7% in the previous financial year.

However manufacturing sector growth slowed down to 8.3% in the 2010-11 financial year from 8.8% in 2009-10.

Growth of the mining and quarrying sector also slowed to 5.8% in 2010-11 from 6.9% in 2009-10.

The electricity, gas and water supply segment grew by 5.7% last fiscal, compared to 6.4% in 2009-10.