5.3% economic growth in July-Sept below expectations: FM

Says scanty rainfall and poor showing by the manufacturing sector behind low growth rate

Terming the second quarter economic growth rate of 5.3% as "below expectations", Finance Minister P Chidambaram today said it was mainly due to scanty rainfall and poor showing by the manufacturing sector.

"Overall, the growth rate is below our expectations," Chidambaram said in a statement after the official data showed that GDP growth fell to 5.3% in July-September period.

The gross domestic product (GDP) had expanded by 6.7% in the same period of last fiscal.

In the April-June period of 2012-13, the economic growth rate was 5.5%.

During the three-month period ended September 30 this year, farm sector output expanded by just 1.2%, against 3.1% in the same period last year.

"The reduction in growth in agriculture and allied sectors has been on account of rainfall being lower than normal, particularly in June-July. The impact on the khariff crop has pulled down the growth rate," Chidambaram said.

He said the industry growth has been lower mainly due to poor show by manufacturing, which grew marginally by 0.8%, against 2.9% in the same period of 2011-12.

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

"The growth rate of services sector showed some improvement in Q2 of 2012-13 vis-a-vis the Q1, it still remains below the trend level," Chidambaram said.

The economic growth in the first six months (April- September) of this financial year (2012-13) is 5.4%, lower than 7.3% clocked in the year-ago period.