Economic growth set to slip below 7 percent

High interest rates, fragile global economic conditions and the government\\\’s inability to push through key reforms have cramped growth.

As per the advanced estimates released by the Central Statistical Organisation, this year\\\’s projected growth is the slowest since the global financial crisis of 2008-09, when the GDP growth had slumped to 6.7 percent.

The current estimate is a sharply lower than the 9 per cent growth projection for 2011-12 made by the government in its pre-Budget survey in February last year.

The latest GDP growth estimate of 6.9 per cent for the entire fiscal means that the pace of economic expansion slowed in the second half of 2011-12, given that GDP growth in the April-September, 2011, period stood at 7.3 per cent.

Finance minister Pranab Mukherjee found the data dissappointing.

"Though figures of advance estimates for GDP for the current fiscal somewhat look disappointing by our recent growth experience, considering the current global context and the slowdown in the domestic industrial sector in particular, the growth performance is not all that surprising," Mukherjee said.

As per the data, manufacturing growth is also expected to drop down to 3.9 per cent this fiscal from 7.6 per cent last year.

Agriculture and allied activities are likely to grow at 2.5 per cent in 2011-12, compared to a robust growth of 7 per cent in 2010-11.

Trade, hotels, transport and communication sectors are expected to grow by 11.2 percent, while financing, insurance, real estate and business services could grow by 9.1 percent.

The mining sector will see a negative growth of 2.2 percent.