India's 2012 GDP hits decade low

India's Gross Domestic Product (GDP) in the 2012 fiscal year grew less than 5 percent, the lowest in a decade, according to data published by the government of India.

According to the data, GDP in the last three months of the year that ended in March 2013, was only 4.8 percent. The manufacturing sector grew 2.6 percent while the agricultural export grew 1.4 percent.

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"When the government is not ready to provide some alternative sources of demand in the economy, that sort of growth would only be forthcoming, because we should remember that the external sector relies on the global economy. It would not be appropriate now to be considering it as an impetus for growth," said Krishna Kumar, an economics professor at the University of Delhi.

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"Even leading companies and firms in the country did not perform well. We could really say there was a big downswing with respect to production, with respect to employment," added Kumar.

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The high inflation and financial deficit are the biggest problems facing the Indian economy. To address them, the government expanded the market to welcome foreign investment in 2012. Then, at the beginning of 2013, the Reserve Bank of India (RBI) adjusted the country's interest rate three times.

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As a result, the inflation rate in April dropped to its lowest in three years to just 5 percent. However, the Indian rupee continued to depreciate in the past week, hitting a record low to reach the latest 56:1 against the US dollar.

According to the Global Competitiveness Report released by the Swiss International Institute for Management Development on Thursday, India's competitiveness rating fell from the 35th in the world in 2012 to its the 40th.