India’s GDP growth slips to a four-year low of 4.4% in Q1-FY’14

The country's economic growth slipped to 4.4 per cent in the first quarter of the current fiscal (April-June 2013-14), the slowest pace in at least four years, dragged down by a contraction in manufacturing and mining activities.

The country's gross domestic product (GDP) had expanded by 5.4 per cent in the April-June quarter of the previous fiscal.

On a sequential basis, the GDP growth rate declined from 4.8 per cent in the January-March period of 2012-13.

GDP at factor cost at constant (2004-2005) prices for Q1 of 2013-14 is estimated at Rs13,71,000 crore, against Rs13,14,000 crore in Q1 of 2012-13, showing a growth of 4.4 per cent over the corresponding quarter of the previous year, data released by the Central Statistics Office (CSO) showed.

Economic activities which registered significant growth in Q1 of 2013-14 included 'financing, insurance, real estate and business services' (8.9 per cent) and 'community, social and personal services' (9.4 per cent).

The estimated growth rates in other economic activities are: 'trade, hotels, transport and communication' (3.9 per cent), 'electricity, gas and water supply' (3.7 per cent), 'construction' (2.8 per cent), 'agriculture, forestry and fishing' (2.7 per cent) during the quarter, while sectors such as 'manufacturing (-1.2 per cent), and 'mining and quarrying' (-2.8 per cent) showed a declining trend.

Production of coarse cereals and pulses during the rabi season of agriculture year 2012-13, which has been used in compiling the estimate of GDP from agriculture in Q1 of 2013-14, recorded growth rates of 9.8 per cent and 13.7 per cent, respectively, while production of rice and wheat declined by 7.0 per cent and 2.6 per cent over the production in the corresponding season of previous agriculture year.

Among commercial crops, production of oilseeds increased by 11.4 per cent during the rabi season of 2012-13.

On the other hand, latest estimates on the index of industrial production (IIP) the index of mining, manufacturing and electricity, registered growth rates of (-) 4.5 per cent, (-) 1.2 per cent and 3.5 per cent, respectively, during Q1 of 2013-14, compared to the growth rates of (-) 1.6 per cent, (-) 0.8 per cent and 6.4 per cent, respectively, during Q1 of 2012-13.

Production and consumption in key construction sector industries such as cement and finished steel posted growth rates of 3.3 per cent and 0.2 per cent, respectively, during Q1 of 2013-14.

In the service sector, the key indicators of railways, namely, the net tonne km grew 1.8 per cent but passenger km declined by 3.4 per cent during Q1 of 2013-14.

In the case of other transport sectors, passengers handled by the civil aviation registered growth rates of 3.4 per cent, while sales of commercial vehicles, cargo handled at major ports, cargo handled by the civil aviation registered the declines of 8.1 per cent, 1.0 per cent and 2.1 per cent, respectively, during Q1 of 2013-14 over Q1 of 2012-13.

The other key indicators, namely, aggregate bank deposits, and bank credits have shown growth rates of 13.8 per cent, and 13.7 per cent, respectively, as of June 2013.

It may be mentioned that the growth of credit and deposits as of June 2012 were 16.5 per cent and 13.5 per cent, respectively.