GDP data confirmation of slowdown: industry

Terming the latest GDP data as "official" confirmation of slowdown, India Inc today said if the trend continues, the country's economic growth is likely to be 7.0-7.1% this fiscal, lower than the earlier estimates of about 9%.

Ficci said the growth would have been lower than 6.9% in July-September quarter of 2011-12 if the data for corresponding period last year was not revised downward from 8.9% to 8.4%.

"If the current trends are any indications, [it is estimated that] the GDP growth in the current fiscal will now be in the range of 7.0-7.1% with significant downward risks," Ficci Secretary General Rajiv Kumar said.

The chamber also expressed apprehensions that the GDP growth rate of the last fiscal could be revised downward from 8.5%.

CII said the CSO data is an "official vindication of the weakness already apparent in the industrial sector. We are extremely concerned about the direction of the economic growth trajectory," chamber Director General Chandrajit Banerjee said.

He said a significant pull-down in investments is apparent and this can take the overall economy down further.

The industry is complaining that tight monetary policy followed by the Reserve Bank is hampering investments.

Banerjee said the reform process should be speeded up. CII said "the decisions should be taken up with a sense of urgency."

Assocham said stubbornly high inflation, rising cost of funds and crisis hit global capital markets were largely responsible for the slowdown.

"RBI should start cutting bank rates so that the cost of credit comes down. Due to near double-digit inflation, the cost of raw material has shot up resulting in slowdown in factory output," chamber's Secretary General DS Rawat said.