New Delhi: Terming the 6.9% economic growth in the second quarter as “lower than expectation”, the Prime Minister’s Economic Advisory Council today said that good performance by farm sector would take annual growth for FY12 to 7.5%.
“The growth in second quarter is lower than expectation. The poor performances of manufacturing sector and falling industrial production have led to lower growth,” PMEAC Chairman C Rangarajan told.
He, however, exuded confidence that growth would be better in the next two quarters.
“Performance of the economy in the third and fourth quarters should be better on account of improved performance of agriculture. We will still be able to reach the target of 7.5% [growth] for the fiscal,” Rangarajan said.
His comments follow the release of data showing that Gross Domestic Product growth in the second quarter was 6.9%, the lowest in nine quarters, on account of slowdown in manufacturing and decline in mining.
GDP growth was 8.4% in the second quarter of FY11. Economic growth in the first quarter of the current fiscal was 7.7%.
Cumulative GDP growth in the first half (April-September) of FY12 also moderated to 7.3% from 8.6% in the corresponding period last fiscal.
The Reserve Bank has already lowered its growth projection for the current fiscal to 7.6% from the earlier estimate of 8% on account of the global slowdown and high domestic inflation.
The Indian economy had grown by 8.5% in FY11