Slow Q1 growth maybe due to EU, US crisis: govt

The government today said the slowdown in the Europe and US may have contributed to the moderation in India's economic growth rate to 7.7% during the first quarter of the current fiscal.

"The slowdown in the US and European economies could be one of the reasons for India's growth slowing down to 7.7% in the first quarter of 2011-12," Minister of State for Finance Namo Narain Meena said in a written reply to the Rajya Sabha.

The 7.7% growth rate in the April-June period was the slowest experienced in six quarters.

"The persistence of inflation and consequent monetary tightening, together with deceleration in Index of Industrial Production (IIP), could have caused slower growth in the first quarter of 2011-12. Besides, the global economic environment, particularly the lingering euro zone crisis, is resulting in added uncertainties," Meena said.

The minister said at the time of presentation of the Budget for 2011-12 in February this year, the economy looked poised to revert to the 9%-plus growth trajectory.

"Hence, the Economic Survey had projected growth at 9% level for 2011-12," he said.

The RBI had earlier projected that the economy will grow by 8% this fiscal. However, it has since revised the projection downward to 7.6% on account of the global slowdown and high domestic inflation.

The Indian economy expanded by 8.5% in 2010-11.

"Specific measures taken in the recent period to boost growth include, among others, enhancing investment in the infrastructure sector through creation of an infrastructure debt fund, focusing on public private partnerships, announcement of New Manufacturing Policy, new Draft Telecom Policy," Meena said.

In this regard, he also mention the introduction of the Land  Acquisition Bill in Parliament and steps taken to develop the banking sector.

The minister said official estimates for economic growth this fiscal will be out in February, 2012.

"The official estimates regarding the growth rate of GDP for the year 2011-12 will be available on February 7, 2012," he said.