India’s economic growth slows to 5.3% in Q2

India’s economic growth slows to 5.3% in Q2India's economic growth slowed to 5.3 per cent in the July to September quarter, from 5.5 per cent in the previous quarter and 6.7 per cent in the same quarter of last year.

The rate of economic growth for the past quarter marked the slowest pace of economy's expansion in three years. Combined growth rate in the first and second quarter of current fiscal stood at 5.4 per cent, down from 7.3 per cent in the corresponding period of previous quarter. The union finance ministry said the figures, released by the Central Statistics Office (CSO) on Friday, were below its expectations.

Sluggish performance by agriculture and manufacturing sectors were held responsible for dragging down the economy's overall growth. Lower than usual rainfall during the June to July period reduced kharif crop (summer crop) production.

The sluggish growth rate will definitely pressurize the government to implement harsh economic reforms and the central bank to slash key interest rates to provide a boost to economic growth.

Samiran Chakravorty, an economist with Standard Chartered Bank, said, "The point to look for now is what would be the extent of recovery in the second half. That would depend on the trajectory of economic re forms and the extent of monetary easing."

The economy will now have to grow by more than 6.5 per cent during the second half current fiscal to end the year with growth rate of 6 per cent. But the Prime Minister's Economic Advisory Council's chairman C Rangarajan recently scaled down his earlier projection about economic growth to between 5.5 and 6 per cent.