The economic growth of India declined to 7.6 percent for the second quarter of this fiscal. The low growth rate in the manufacturing sector is supposed to be the main cause of the fall. The growth rate in the manufacturing sector was recorded only 5 percent during the period under review (July-September, 2008). In contrast, the manufacturing sector had incurred a growth rate of 9.2 percent at the same period of time, last year. As per the data on gross domestic product (GDP) issued by the Central Statistical Organisation (CSO), India's growth rate stood at 7.9 percent during the first quarter of the fiscal (April-June) which has gone down to 7.6 percent in the second quarter.

 

Report confirms that, the agricultural sector also incurred a low growth of 2.7 percent, as opposed to 4.7 percent during the second quarter of fiscal 2007-08. However, transport and communications experienced 10.8 percent growth rate during second quarter of this fiscal. Although the global economic slow down has hit India much before, its impact on the Indian economy will be actually felt in third and fourth quarters, stated Sri Ram Khanna, Professor and Head of Department in Delhi School of Economics.

 

According to Dalip Kumar, head of projects at the National Council for Applied Economics Research (NCAER), India's industrial growth will deteriorate further by next year. Market analysts are of the opinion that the government has to take policy measures to avert further fall in the rate of manufacturing sector. Meanwhile, according to PM Manmohan Singh, Finance Minister P. Chidambaram and Reserve Bank of India (RBI) Governor D. Subbarao, India's economy will expand by 7-8 percent during the current fiscal year ending March 31, 2009.