Quick decisions needed to accelerate investments: Chidambaram
31 Aug 2012
Finance minister P Chidambaram today said quick decisions were needed to remove bottlenecks hampering investments in order to reverse the trend of declining production in the manufacturing sector.
His comments followed the release of the first quarter GDP numbers for 2012-13 by the Central Statistics Office (CSO) today, which showed the GDP growth at factor price at constant (2004-05 prices) at 5.5 per cent, against 8.0 per cent in Q1 of 2011-12.
This, however, is little more higher than the growth rate of 5.3 per cent achieved in Q4 of 2011-12, Chidambaram said.
After continuous reduction in the growth rate in successive quarters beginning in the fourth quarter of 2010-11, this is the first time when quarterly growth rate has exceeded the growth rate in the previous quarter.
''Of course, the decline in the growth of fixed investment (0.7 per cent in Q1 of 2012-13 as against 14.7 per cent in Q1 of 2011-12) is a source of concern to the government. It emphasises once again the need to take quick decisions to accelerate investments, especially removing all bottlenecks to investments in the manufacturing sector,'' Chidambaram said.
At the same time, he said, there are also encouraging signs such as the growth of the construction sector at 10.9 per cent (Q1 of 2012-13) as against 3.5 per cent in Q1 of 2011-12.
The decline in the GDP was mainly on account of poor showing by the manufacturing sector where the growth rate decelerated to 0.2 per cent from 7.3 per cent in the same quarter in 2011-12.
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