Thaindian News

New Delhi, Nov 30 (IANS) The country’s policymakers Wednesday expressed concern over GDP growing at its slowest pace in more than two years at 6.9 percent in the quarter ended Sep 30, but added that the situation is expected to improve by the end of this fiscal.

Finance Minister Pranab Mukherjee said the government would do its best to improve the situation.

“Had it been 10 years ago, this would have elated me, but today I cannot have that satisfaction because we reached the higher trajectory of growth, from there we are slipping,” Mukherjee told reporters here.

“Nonetheless, we shall have to try to face the situation and to see what best we can do at this given situation,” he said.

Mukherjee said the overall Gross Domestic Product (GDP) growth has slowed in the last two quarters mainly because of poor performance of mining and manufacturing sectors.

Growth of the manufacturing sector slumped to 2.7 percent for the quarter ended Sep 30, 2011, as compared to 7.8 percent during the same quarter of the last fiscal.

The mining sector growth slowed to 3.2 percent during the quarter under review from 8 percent during the corresponding quarter of 2010-11.

The GDP growth in the first six months of the current financial year slowed to 7.3 percent from 8.6 percent during the same period of last fiscal, official data showed Wednesday.

Deputy Chairman of the Planning Commission Montek Singh Ahluwalia forecast a similar growth pattern for the third quarter, adding that the GDP growth for the fiscal is expected to be between 7 to 7.5 percent.

“My expectation is that it (GDP growth) may end up being about the same in third quarter (October-December) and perhaps in the fourth quarter it will improve. The growth rate is going to be between 7-7.5 percent this fiscal,” he said.

He also did not rule out the possibility of a small slippage in fiscal deficit target. The government has pegged the fiscal deficit target for 2011-12 at 4.6 percent of GDP.

Meanwhile, Chief Economic Adviser to the finance ministry Kaushik Basu blamed the slowdown on global factors and sluggish decision-making.

“There are three causes of this temporary slowdown — a gloomy global scenario, we battling an inflation… there is no getting away from that… and there is some slowdown in decision-making,” Basu told reporters here.

But he was optimistic about future growth.

“By the end of the year, we should pick up. The third quarter will also be a difficult quarter, but in fourth quarter we should see a very good pick-up,” he said.