Economy grows by dismal 5.3% in Q3

The Indian economy grew by 5.3 per cent in the third quarter, the slowest quarterly growth this fiscal, pulled down by contraction in manufacturing and farm production even as some services showed robust expansion.

The farm sector, believed to be de-coupled from the global financial meltdown, also succumbed to the pressure of the slowing economy and fell by 2.2 per cent in October-December, 2008-09 against the growth of 6.9 per cent a year ago.

In the third quarter, industrial production, led by manufacturing, contracted in the two months of October and December.

For the whole quarter, manufacturing declined by 0.2 per cent against a substantial expansion of 8.6 per cent a year back.

Bucking the trend, community, social and personal services grew by a strong 17.3 per cent against 5.5 per cent in the year-ago period, part of which may be contributed by revised the salary structure of government employees.

For the first nine months of this fiscal, the economy grew by 6.9 per cent against nine per cent in the same period of 2007-08.

For the whole of 2008-09, the Indian economy is projected to grow by 7.1 per cent. To achieve that, the economy must grow quite substantially by over seven per cent next quarter.